The naira yesterday appreciated to N1,350 per dollar in the parallel market from N1,430 per dollar on Monday.
Similarly, the naira yesterday appreciated to N1,382.95 per dollar in the Nigerian Foreign Exchange Market (NAFEM). Data from FMDQ showed that the indicative exchange rate for NAFEM fell to N1,382.95 per dollar from N1,408.04 per dollar on Monday, indicating N25.09 appreciation for the naira.
Consequently, the margin between the parallel market rate and NAFEM widened to N32.95 per dollar from N21.96 per dollar on Monday.
Over the past month, the Nigerian naira has surged by 18.28 percent to reach N1,408.04 on Monday, up from its low of N1,665.50 recorded on February 23, 2024, as per data compiled from the FMDQ Securities Exchange.
The recent appreciation of the naira against the dollar can be attributed to foreign exchange reforms implemented by the Central Bank of Nigeria (CBN).
Key reforms include the consolidation of exchange rate windows, liberalization of the FX market, resolution of FX backlog obligations for banks and airlines, implementation of a Price Verification System (PVS), imposition of limits on banks’ Net Open Position, removal of the daily cap on remunerable Standing Deposit Facility (SDF) to N2 billion, and restructuring of the Bureau De Change (BDC) segment.
The additional measures implemented are aimed at promoting a market where both the buyer and seller are willing participants. These measures include the removal of margin limits for International Money Transfer Operator (IMTO) remittances, the introduction of a two-way quote system, and comprehensive reforms within the BDC segment to bolster stability, transparency, supply, and price discovery in the Nigeria Autonomous Foreign Exchange Market.
The Central Bank of Nigeria (CBN) sold dollars to Bureau De Change (BDC) Operators at a rate of N1,251.
In a circular issued by the CBN, the BDCs were directed to sell to eligible customers at a rate that does not exceed 1.5 percent above the purchase price.