The Nigerian Naira has shown significant signs of strengthening against the US dollar in both official and parallel markets. Data from FMDQ Securities Exchange Limited reveals that the Naira reached a rate of 1,494.03/$ at the official window on Thursday.
his appreciation was mirrored in the parallel market, where the Naira strengthened to 1,510.00/$.
This concurrent strengthening in both markets has led to a narrowing of the spread between the official and parallel market exchange rates. The difference now stands at a mere 15.5/$, indicating a convergence of the two rates. This narrowing gap is a positive sign and suggests that the various policies implemented by the Central Bank of Nigeria (CBN) are beginning to yield results.
CardinalStone Research’s daily market report further corroborates this positive trend. The report indicates that the Naira appreciated by 1.04% to reach 1,494.03/$ in the official market. Simultaneously, the parallel market witnessed an even stronger appreciation of 1.66%, bringing the rate to 1,510.00/$.
This upward trend for the Naira has been observed over consecutive trading days. On the preceding day, the FMDQ recorded a 0.05% rise to 1,509.53/, while the parallel market saw a 0.65% appreciation to N1,535.00/. The consistent strengthening suggests a growing momentum in favor of the Nigerian currency.
A key factor contributing to this positive development is the CBN’s recent directive extending dollar sales to Bureau De Change Operators until May 30, 2025. This move has been widely recognized as a significant step towards stabilizing the foreign exchange market.
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Aminu Gwadebe, the President of the Association of Bureau De Change Operators, had earlier expressed optimism about the Naira’s potential for appreciation. He highlighted the CBN’s directive to allow Bureaux de Change access to interbank proceeds as a crucial factor in injecting liquidity into the market and reducing panic among traders.
The Naira’s strengthening coincides with the CBN’s Monetary Policy Committee (MPC) decision to maintain the benchmark interest rate at 27.50%, along with other key parameters. This decision reflects the MPC’s assessment of the current economic climate and its confidence in the measures already in place.
Following the MPC meeting, CBN Governor Olayemi Cardoso emphasized the stability observed in the foreign exchange market. He noted with satisfaction the recent macroeconomic developments, including the Naira’s appreciation, and their potential positive impact on price dynamics in the near to medium term.
The MPC acknowledged the benefits of improvements in the external sector, including the convergence of exchange rates between the official market and the Bureau de Change. The committee urged the CBN to continue its efforts to boost market liquidity and recognized the positive impact of recently introduced measures like the Electronic Foreign Exchange Matching System (B-Match) and the Nigeria Foreign Exchange Code in promoting transparency and credibility in the market. The MPC anticipates increased foreign direct and portfolio investments, as well as diaspora remittances, as investor confidence grows.
