Naira Appreciate Against Dollar As New Exchange Rate Emerges

Yesterday, the Nigerian naira saw an increase in value to N1,350 per dollar in the parallel market, up from N1,430 per dollar recorded on Monday.

Similarly, in the Nigerian Foreign Exchange Market (NAFEM), the naira appreciated to N1,382.95 per dollar. Data from FMDQ indicated a decline in the indicative exchange rate for NAFEM from N1,408.04 per dollar on Monday, marking a N25.09 appreciation for the naira.

Consequently, the margin between the parallel market rate and NAFEM widened to N32.95 per dollar from N21.96 per dollar previously.

Over the past month, the Nigerian naira has shown a significant surge of 18.28 percent, reaching N1,408.04 on Monday from its low of N1,665.50 recorded on February 23, 2024, as per data compiled from the FMDQ Securities Exchange.

The recent appreciation of the naira against the dollar can be attributed to foreign exchange reforms enacted by the Central Bank of Nigeria (CBN).

These reforms include the consolidation of exchange rate windows, liberalization of the FX market, resolution of FX backlog obligations for banks and airlines, implementation of a Price Verification System (PVS), imposition of limits on banks’ Net Open Position, removal of the daily cap on remunerable Standing Deposit Facility (SDF) to N2 billion, and restructuring of the Bureau De Change (BDC) segment.

Meanwhile, the Central Bank of Nigeria (CBN) sold dollars to Bureau De Change (BDC) Operators at a rate of N1,251, as outlined in a circular issued by the CBN.

In the directive, BDCs were instructed to sell to eligible customers at a rate not exceeding 1.5 percent above the purchase price.