Naira Bounces Back, as Dollar Exchanges Same Rate in Official and Black Markets First Time in 8 Years

• The naira to dollar exchange rate at the official and black markets met for the first time in eight years and closed at N756
• This followed the recent foreign exchange reforms embarked upon by the Central Bank of Nigeria (CBN)
• Kingsley Obiora, the CBN’s deputy governor, has further explained the ongoing operational reforms in Nigeria’s foreign exchange markets

For the first time in eight years, the Nigerian currency closed at the same rate in official and unofficial foreign exchange markets.

Data obtained from FMDQ securities revealed that at the Investors and Exporters(I&E) window, which serves as the official exchange market, the naira closed trading at N756.61 on Tuesday, June 20, 2023.

This represents a 1.8% or N13.77 appreciation compared to the N770.38/$1 it traded on Monday, June 19.

Read also

Nigeria’s foreign reserves drop by over $600M in first 18 days of Tinubu’s presidency, hit 2-year low

Despite the significant demand for foreign currencies in the official market, the Naira performed well on Tuesday.

Legit.ng observed that the value of foreign exchange transactions recorded on Tuesday increased by 72.3% or $56.44 million to $134.47 million, compared to $78.03 million traded on Monday.

Naira to dollar exchange rate at black market

The scenario was similar in the unofficial market, also known as the black market, as the Naira appreciated against the US dollar.

Traders who spoke to Legit.ng confirmed that the exchange rate for Naira to dollar settled at N756/$1, contrasting with Monday’s rate of N759/$1.

However, in the Peer-2-Peer (P2P) segment, another unofficial market primarily for online traders, the local currency depreciated against the dollar by N4, quoting at N776/$1 compared to the previous day’s value of N772/$1.

Read also

“N800/$”: Black market traders sell dollar cheaper than banks as exchange rates near convergence

CBN explains ongoing FX reforms

Meanwhile, Deputy Governor Kingsley Obiora of the CBN has clarified the ongoing reforms in Nigeria’s foreign exchange market.

In an interview with Bloomberg, Obiora explained that contrary to popular belief, the CBN currently operates managed naira float, not a free float.

He further stated that the managed float means CBN has relaxed control on foreign exchange markets.

He added:

“In the next couple of weeks, more adjustments will be introduced into the market.”

“It remains naira card”: CBN lifts dollar deposit restriction on bank accounts

In another report, the CBN has removed the dollar cash deposit restrictions on domiciliary accounts that were put in place under the leadership of Godwin Emefiele.

The latest development will allow Nigerians unrestricted access to funds in their accounts.

The new policy changes are expected to enhance liquidity and stability in Nigeria’s foreign exchange market.

Source: Legit.ng