Naira Appreciates to N1,640 per Dollar in Parallel Market

The Naira has appreciated to N1,640 per dollar in the parallel market from N1,655 per dollar on Monday.

According to data published by the Central Bank of Nigeria (CBN) showed that the exchange rate for the Nigerian Foreign Exchange Market (NFEM) fell to N1,526.3 per dollar from N1,533.5 per dollar on Monday, indicating N7.2 appreciation for the naira.

Consequently, the margin between the parallel market and NFEM rate narrowed to N113.7 per dollar from N121.5 per dollar on Monday.

Similarly, the Naira appreciated N1,526.3 per dollar in the official foreign exchange market.

The development comes after a tumultuous fall 18 months ago.

Its performance since December gives a glimmer of hope, with the naira holding in a narrow range roughly between 1,550 and 1,520 per dollar.

Analysts have attributed the almost two months’ stability to the ongoing reforms embarked on by the CBN some of which are the introduction of the Electronics Foreign Exchange Matching System (EFEMS) last December and the FX code scheduled to be launched by the end of January.

According to Taiwo Oyedele, chairman of Nigeria’s Fiscal Policy and Tax, the new FX code introduced by the CBN would enhance transparency and “about $20 million every day is off the market.”

The CBN governor, Olayemi Cardoso said exchange-rate reforms that have made the naira more competitive, present an opportunity to investors.

“We’ve found ourselves in a situation where the foreign exchange rate has adjusted,” Cardoso said in a virtual briefing organised by the Nigeria Economic Summit Group (NESG), referring to the naira’s sharp depreciation last year.

The weakening offers investors the chance to “take advantage” of a currency that has become “a lot more competitive,” he said.