Naira Depreciates Against US Dollar At Parallel Market

The Naira declined to ₦1,100 per dollar in the parallel market on Tuesday, from ₦1,080 per dollar it traded the previous day.

Reports revealed that the Naira also depreciated in the Nigerian Foreign Exchange Market (NAFEM) to ₦1,148.14 per dollar.

According to data from FMDQ, the indicative exchange rate for NAFEM rose to ₦1,148.14 per dollar from ₦1,136.04 per dollar on Monday, indicating ₦12.1 depreciation for the naira.

As a result, the margin between the parallel market and NAFEM rates decreased to ₦48.14 per dollar from ₦56.04 per dollar on Monday.

Naira Regained Value Against US Dollar Faster Than Expected – Says BDC Operators

According to the Association of the Bureau De Change Operators of Nigeria (ABCON), the Nigerian currency, Naira, has appreciated faster than anticipated against the United States dollar.

ABCON President, Aminu Gwadabe, made this remark while appearing virtually on an episode of Channels Television’s Business Incorporated programme on Tuesday.

Gwadabe revealed that BDC operators are currently purchasing the dollar at ₦980/$1 and selling it at ₦1,020/$1, in contrast to the official rate of ₦1161/$1 set by the Central Bank of Nigeria (CBN).

Naija News reports that over the past few weeks, the naira has appreciated significantly by over 40%, rising from approximately ₦1,900/$1 in early January to around ₦1,100/$1 at present.

The CBN has implemented several measures to boost the naira against foreign exchange, such as clearing approximately $7 billion in valid foreign exchange backlogs, providing FX to over 1,500 BDC operators at the official rate, cracking down on cryptocurrency platforms like Binance for engaging in speculation, and more.

The head of the BDC sector commended the present government for its progress, noting that this is the first time in the past 15 years that the dollar is trading at a lower rate in the parallel market than the official rate.

Gwadabe said: “It’s a long journey, it did not start today. It’s a culmination of many factors, even though it happened faster than expected. I want to congratulate the management of the Central Bank. For the first time in the history of (Nigeria), over the past 15 years, we have never seen where the open market is lower than the CBN rate. So, kudos to the Central Bank and congratulations to Nigerians.

“There is calmness now, and we have not been seeing speculations coming into the market, which hitherto has been the albatross that was keeping the naira under pressure.

“What we are seeing now is to show (that) what happened before has no economic fundamentals; it’s just a bubble, and the bubble has burst.”