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Naira appreciates against dollar at official window, parallel market

Naira appreciates against dollar at official window, parallel market
April 08
22:54 2024

The naira, on Monday, appreciated to N1,120 per dollar at the parallel section of the foreign exchange (FX) market.

The current FX rate signifies a decrease of 9.67 percent from the N1,240/$ reported on April 3.

Bureau de change (BDC) operators, also known as street traders, in Lagos, quoted the buying rate of the local currency at N1,100 and the selling rate at N1,120 — leaving a profit of N20.

At the official window, the local currency appreciated by 1.63 percent to N1,230.61/$ on Monday, from N1251.05/$ on April 5.

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FMDQ Exchange, a platform that oversees the Nigerian Autonomous Foreign Exchange Market (NAFEM), also known as the official window, reported a turnover of $125.55 million.

At the end of trading, the gap between the parallel market and the official window rates stood at N110.61.

Meanwhile, on March 10, Goldman Sachs had predicted that the naira would appreciate to N1,200 against the dollar in the next 12 months.

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“We thus see reason for the Naira to be undervalued, and we see it appreciating to 1200 within the next 12 months,” Goldman Sachs said.

Goldman Sachs said Nigeria is “turning the corner” following its recent currency crisis.

The naira has been depreciating amid the Central Bank of Nigeria’s (CBN) intervention in the foreign exchange market.

In February, CBN sold $20,000 to each BDC at the rate of N1,301/$. However, in March, the apex bank sold $10,000 to each BDC at the rate of N1,251/$.

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The rate CBN sold dollars to BDC operators was further reduced to N1,101/$1 on Monday when the apex bank announced plans to sell $10,000 to the BDCs.

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