Naira Appreciates to N1,535 per Dollar in Black Market Amid Improved Liquidity

The naira has gained value in the parallel (black) market, reaching N1,535 per dollar, driven by a reduction in demand for the greenback and improved liquidity conditions. This represents a N25 (1.6%) appreciation compared to the N1,560 per dollar rate recorded on Monday. Traders confirmed that the market saw enough dollars to meet demand, which remained relatively low.

In the official foreign exchange market, the naira also showed improvement, with the Central Bank of Nigeria (CBN) reporting a rate of N1,510 per dollar at the close of trading on Tuesday. This marked a slight improvement from N1,512 per dollar the previous day. The highest rate observed in the official market was N1,515 per dollar, with the lowest at N1,504 per dollar.

CBN Governor Olayemi Cardoso highlighted ongoing financial reforms aimed at narrowing the significant gap between official and parallel market exchange rates, which had once reached as high as 60%. He stated that through consistent policies, market confidence, and transparency, the disparity had reduced to around 4-5%. Cardoso also stressed the importance of stronger economic ties with the Middle East and the Nigerian diaspora, particularly to boost remittance flows.

Cardoso also outlined the CBN’s efforts to improve forex market efficiency, including the introduction of an electronic matching system for better trade visibility and a foreign exchange code of ethics for banks. These measures, along with increasing foreign reserves exceeding $40 billion, were credited with stabilizing the market. However, the reserves fell to $38.88 billion as of February 17, 2025. Despite past economic challenges, the CBN remains focused on restoring market confidence and ensuring stability.

SOURCE: BUSINESS DAY