In recent currency developments, the Nigerian naira witnessed a tale of two markets, showing signs of recovery on the official Nigerian Autonomous Foreign Exchange Market while facing challenges on the parallel market.
The official market saw a slight uptick for the naira against the United States dollar, marking a modest appreciation to N1,499 from its previous low of N1,534/$. This translates to a 2.3% gain or N35, as reported by FMDQ Exchange, a platform dedicated to transparently reporting official foreign exchange trading in the country.
This upward movement comes amidst a backdrop of economic reforms, including the removal of fuel subsidy and efforts towards unifying the exchange rate market spearheaded by President Bola Tinubu. Over the course of several months, the local unit has experienced a gradual weakening, sliding from N464.67/$ in May 2023 to its current standing at N1,490 as of February 2024. Concurrently, the parallel market also witnessed a decline, with the local currency dropping from N763/$ to N1,470/$ during the same period.
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While the official market saw a glimmer of hope, challenges persisted in the parallel market. Monday marked another low point for the naira, hitting N1,534/$, following previous dips to N1,099.05/$ on December 8 and N1,348.63/$ on January 30, 2024.
Despite these setbacks, the parallel market maintained its upward trend, with rates reaching N1,530 from N1,503 as closing rates on Monday.
Insights from Currency Traders
Insights from Bureau De Change operators shed light on the market dynamics. In Abuja, currency traders reported opening rates of N1,509/$ and closing rates at N1,515/$ during intra-day trading, ultimately reaching N1,530 per dollar.
Ibrahim Taura, a BDC operator in Wuse, Abuja, noted, “We started today’s trade at N1,509/$ but the rate closed at N1,530/$.” Despite the prevailing high rates, demand for the greenback continued to surge.
Similarly, Nuhu Zakari, operating at the Abuja airport, disclosed purchasing the dollar at N1,525.
Amidst these fluctuations, sales of dollars by banks witnessed a significant decline, plummeting by 54.2% from $253.77 million on Friday to $116.11 million on Monday, as per the latest sales data by the FMDG. Last week, commercial banks collectively sold a total of $1.97 billion.
