Naira Strengthens in Parallel Market as Gap with Official Rate Narrows

In a notable shift, the Nigerian Naira appreciated to N1,730 per U.S. dollar on the parallel market yesterday, strengthening from N1,740 recorded over the weekend. However, in the Nigerian Autonomous Foreign Exchange Market (NAFEM), the Naira saw a slight depreciation, reaching N1,681.42 per dollar compared to last Friday’s rate of N1,678.87 per dollar. This marks a N2.55 drop in value for the Naira within the official trading environment.

According to data from FMDQ, the exchange rate movements reflect fluctuating demand-supply dynamics, with the margin between the parallel and official NAFEM rate narrowing to N48.58 per dollar, down from N61.13 per dollar last week.

Market analysts from Afrinvest West Africa Limited have predicted that the Naira may see a mixed performance in the days ahead. “The domestic currency experienced varied trading activity last week. Looking ahead, we expect the Naira to remain within a similar range. However, recent rate cuts in major economies have bolstered carry trade potential in emerging markets like Nigeria, especially for those maintaining relatively stable exchange rates,” Afrinvest analysts stated.