The Naira strengthened further in the parallel market yesterday, appreciating to N1,610 per dollar from N1,615 per dollar last Friday, driven by subdued dollar demand.
However, in the official market, the Naira depreciated to N1,495.6 per dollar.
Data from FMDQ revealed that the indicative exchange rate for the Nigerian Foreign Exchange Market (NFEM) increased to N1,495.6 per dollar from N1,474.78 per dollar recorded last weekend, reflecting a N20.82 depreciation in the Naira’s value.
As a result, the gap between the parallel market rate and the NFEM rate narrowed to N84.4 per dollar from N141.4 per dollar over the weekend.
This development signifies a N45 appreciation for the Naira in the parallel market compared to its rate of N1,655 per dollar last Monday. Similarly, in the official market, the Naira appreciated by N37.9 from its rate of N1,533.5 last Monday.
Currency traders attributed the Naira’s appreciation to weak dollar demand, influenced by the Chinese New Year holiday and market reactions to the launch of the foreign exchange code by the Central Bank of Nigeria (CBN) last week.
A senior official of the Association of Bureaux De Change Operators of Nigeria (ABCON) corroborated this development, noting that some traders with significant dollar reserves sold off in anticipation of reduced demand and a potential decline in the exchange rate, thereby increasing dollar supply in the market.
Additionally, a Vanguard investigation revealed that banks have boosted dollar supply by now honoring customer requests for Personal Travel Allowance (PTA) and Business Travel Allowance (BTA).
According to a top banking official, this change began last week, marking a shift from the prior situation where most banks rarely fulfilled such requests.