Naira Strengthens to ₦1,560/$ in Parallel Market — Margin with Official Rate Narrows
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| Naira Strengthens to ₦1,560/$ in Parallel Market |
The Nigerian Naira recorded a slight appreciation in the parallel market yesterday, trading at ₦1,560 per US dollar compared to ₦1,565/$ recorded on Friday of last week. However, in the Nigerian Foreign Exchange Market (NFEM), the Naira saw a mild depreciation, exchanging at ₦1,538.4/$.
According to the latest data from the Central Bank of Nigeria (CBN), the official rate moved from ₦1,534.9/$ last weekend to ₦1,538.4/$, representing a ₦3.5 drop in value.
This shift reduced the exchange rate gap between the parallel market and the official CBN rate to ₦21.6/$, down from ₦30.1/$ recorded last weekend.
What This Means for the Nigerian Economy
The narrowing margin between the official exchange rate and the parallel market rate could signal reduced speculative activity and better liquidity in the official market. This development is crucial for businesses and importers who rely on foreign exchange for transactions.
A stronger naira in the parallel market often boosts market confidence, though sustained improvement depends on broader forex supply and economic reforms.
Factors Influencing the Recent Movement
Several elements contributed to this shift, including:
- Improved forex inflows from oil sales and remittances.
- CBN’s intervention in the forex market to stabilize rates.
- Reduced demand pressure in the parallel market.
Impact on Businesses and Consumers
For Nigerian consumers, a stronger naira means lower import costs, which could help ease inflation. Businesses involved in international trade might also benefit from a narrower exchange rate gap, as it minimizes arbitrage opportunities and promotes market stability.
Tracking Real-Time Naira Exchange Rates
For accurate and up-to-date exchange rates, Nigerians are advised to check CBN’s official FX rates daily and compare with parallel market trends to make informed financial decisions.
