Naira surges to N1,200/$ on black market amid CBN adjustment
The Nigerian naira has continued its upward trajectory, reaching a rate of 1,200 against the US dollar on the black market following an adjustment by the Central Bank of Nigeria (CBN). This marks a significant appreciation from the previous rate of 1,240 per dollar, indicating a 3.33 percent increase. The adjustment comes after the CBN lowered the rate at which it sells to Bureau De Change Operators, sparking renewed strength in the currency.
According to reports collated from various street traders and trading platforms, the naira has now gained 52.08 percent of its value against the dollar on the black market, amounting to an increase of N625. This surge underscores the volatility of Nigeria’s foreign exchange market and highlights the impact of central bank policies on currency dynamics.
However, concerns remain over the sustainability of this trend and the potential impact on inflation and economic stability in Nigeria.
The Central Bank of Nigeria (CBN) on Monday reviewed the exchange rate for the Bureau De Charge (BDC) Operators to N1,101 per dollar from N1,251/$1 as it plans to sell $15.88 million to 1,588 eligible BDCs.
In a letter addressed to the president of the Association of Bureau De Change Operators of Nigeria, the CBN announced the sale of $10,000 to the BDC operators at an exchange rate of N1,101 per US dollar.
This development aims to address retail market demand for eligible invisible transactions. The letter, signed by W.J. KANYA on behalf of the director of the trade and exchange department, outlines the directive for BDCs to sell the acquired forex to eligible end-users at a spread not exceeding 1.5 percent above the purchase price.
This measure is intended to facilitate access to foreign exchange for legitimate transactions within the retail market.
The Naira, on Friday, closed flat, recording a marginal appreciation of 0.32 percent against the dollar on the official foreign exchange (FX) market.
This was supported by increased dollar supply by willing buyers and willing sellers at the Nigerian Autonomous Foreign Exchange Market (NAFEM).
After trading on Friday, one dollar was quoted at the rate of N1,251.05, stronger than N1,255.07/$1 recorded on Thursday at the NAFEM, according to the data obtained from the FMDQ Securities Exchange.
Dollar supply increased by 78.62 percent to $248.27 million on Friday from $138.99 million recorded on Thursday.
The summary of the FX auction showed that the intraday high strengthened to N1,281 per dollar, stronger than N1,284 quoted on Thursday. The intraday low fell to N1,220 per dollar, weaker than N1,200 closed on Thursday.
The naira on Friday appreciated to 1,245 per dollar on the parallel market, stronger than the rate at the official and Bureau De Change (BDC) segment of the FX market
A report by Comercio Partners noted that the value of the Naira to the dollar strengthened by 446 bps week-on-week to print at N1,251.05/$ this week at the NAFEM window.
