Nigeria Naira Strengthens to N1,150/$ at Parallel Market Amidst Easing Forex Scarcity

The Nigerian Naira experienced a significant appreciation in the parallel market on Monday, as it strengthened to N1,150 per US dollar, marking a remarkable 6.5% increase from its previous rate of N1,230 last Friday. This improvement signals a positive shift in Nigeria's foreign exchange landscape, driven by a decrease in the scarcity of the US dollar at the black market.

Bureaux De Change operators (BDCs), also known as currency traders, shared insights on the ongoing developments. They quoted the buying price of the dollar at N1,120 and the selling price at N1,150, revealing a profit margin of N30. Traders like Aliyu noted, "Dollar is gradually returning to the market. We are seeing more dollars," indicating a positive trend

At the official market, the local currency demonstrated resilience as it appreciated by 5.68%, closing at N789.94 against the dollar on Friday. Official foreign exchange trading on the FMDQ OTC Securities Exchange recorded the highest price of N900/$ within the day's trading, ultimately settling at N696.06.

The Central Bank of Nigeria, in its commitment to maintaining price stability, has consistently voiced its intention to enhance liquidity in the country's foreign exchange market through periodic interventions. As market liquidity improves, the CBN expects to gradually reduce its interventions, fostering a more balanced forex environment.

Furthermore, Nigeria anticipates a substantial influx of $10 billion in foreign currency inflows in the coming weeks, according to Wale Edun, Minister of Finance and Coordinating Minister of the Economy. This strategic move aims to address the forex market's illiquidity and supply shortages, ultimately contributing to a healthier and more functional market.