On Wednesday, the Nigerian naira appreciated against the US dollar on the Investor & Exporter forex window, closing at 793.70/$. This was a significant improvement compared to the previous week when it traded at N825/$ on the same window. The trading started at 778.07/$ and reached a high of 853/$ before settling at the closing rate.
The parallel market, commonly known as the black market, saw the naira being bought and sold at N820/$ and N825/$, respectively, according to some Bureau de Change operators.
The Central Bank of Nigeria recently directed Deposit Money Banks to remove the rate cap on the naira at the I&E window, allowing for a free float of the national currency against the US dollar and other global currencies. This move consolidated all foreign exchange transactions into the I&E window, and all eligible FX transactions would be done through this window.
The I&E market operates on a willing buyer, willing seller system, where entities with demand for foreign exchange seek out others with foreign exchange to sell at mutually agreed prices through an authorized dealer. The CBN clarified that personal travel allowances (PTA), business travel allowances (BTA), and other invisible transactions would continue to be accessed through banks at the prevailing market rate.