Naira Halts Rally at Parallel Market, Extends Gains at Official Window

The naira’s recent upward trend in the parallel section of the foreign exchange (FX) market came to a halt on Wednesday.

From May 17 to May 20, the naira appreciated significantly, rising from N1,550/$ to N1,490 per dollar. However, the local currency depreciated by 1.66 percent to N1,505 against the dollar on Wednesday. Bureau de change (BDC) operators, commonly known as street traders, set the buying price of the dollar at N1,480 and the selling price at N1,505, resulting in a profit margin of N25.

In contrast, at the Nigerian Autonomous Foreign Exchange Market (NAFEM), also referred to as the official window, the naira experienced a slight recovery, appreciating to N1,462.59/$. This marks a 0.21 percent increase from the N1,465.68/$ recorded on May 21. During intra-day trading, the naira fluctuated between N1,531/$ and N1,401/$, according to data from the FMDQ Securities Exchange, which monitors FX trading in Nigeria.

The Central Bank of Nigeria’s (CBN) monetary policy committee (MPC) attributed the volatility in the FX market to seasonal demand for foreign exchange. Speaking at the committee’s 295th meeting, CBN Governor Olayemi Cardoso highlighted that international money transfer operators (IMTOs) face challenges due to charges and fluctuating FX rates.