Naira Appreciates Against Dollar at Official Window, Parallel Market

The Nigerian naira witnessed a surge against the dollar on Monday, appreciating to N1,120 per dollar in the parallel section of the foreign exchange (FX) market. This development marks a significant decrease of 9.67 percent from the N1,240/$ rate reported just days earlier on April 3.

Bureau de change (BDC) operators, colloquially known as street traders, based in Lagos, quoted the buying rate of the local currency at N1,100, with a selling rate of N1,120, thereby pocketing a profit margin of N20.

Meanwhile, at the official window overseen by FMDQ Exchange, which manages the Nigerian Autonomous Foreign Exchange Market (NAFEM), the naira also experienced a notable appreciation, climbing by 1.63 percent to N1,230.61/$ on Monday, up from N1251.05/$ on April 5. The reported turnover at the official window stood at $125.55 million.

As trading concluded, the gap between the rates at the parallel market and the official window widened to N110.61.

This positive trend aligns with earlier predictions, notably by Goldman Sachs on March 10, forecasting the naira’s appreciation to N1,200 against the dollar within the next 12 months. The financial institution noted Nigeria’s progress, indicating that the nation is “turning the corner” following recent currency challenges.

The naira’s recent depreciation has been a subject of concern, attributed in part to interventions by the Central Bank of Nigeria (CBN) in the foreign exchange market. In February, the CBN sold $20,000 to each BDC at a rate of N1,301/$, which was subsequently reduced to $10,000 per BDC at a rate of N1,251/$ in March.

Notably, the CBN further adjusted its selling rate to BDC operators to N1,101/$ on Monday, concurrently announcing plans to sell $10,000 to these entities, reflecting the bank’s ongoing efforts to stabilize the currency market.