The value of the naira yesterday in the parallel market increased to N1,350 per dollar from N1,430 per dollar on Monday.
Similarly, the Nigerian naira strengthened to N1,382.95 per dollar in the Nigerian Foreign Exchange Market (NAFEM) yesterday. According to data from FMDQ, the indicative exchange rate for NAFEM declined to N1,382.95 per dollar from N1,408.04 per dollar on Monday, reflecting a N25.09 appreciation for the naira.
As a result, the gap between the parallel market rate and NAFEM widened to N32.95 per dollar from N21.96 per dollar on Monday.
Over the past month, the Nigerian naira has surged by 18.28 percent, reaching N1,408.04 on Monday, up from its low of N1,665.50 recorded on February 23, 2024, according to data compiled from the FMDQ Securities Exchange.
The recent strengthening of the naira against the dollar can be attributed to foreign exchange reforms implemented 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.
Furthermore, additional measures aim to foster a market where both buyers and sellers are active participants. These measures involve the removal of margin limits for International Money Transfer Operator (IMTO) remittances, the introduction of a two-way quote system, and comprehensive reforms within the BDC segment to enhance stability, transparency, supply, and price discovery in the Nigeria Autonomous Foreign Exchange Market.
The Central Bank of Nigeria (CBN) sold dollars to Bureau De Change (BDC) Operators at a rate of N1,251. In a circular issued by the CBN, the BDCs were instructed to sell to eligible customers at a rate that does not exceed 1.5 percent above the purchase price.