Naira Strengthens to N1,347/$ as Official and Parallel Rates Narrow – Market Convergence Continues

The naira made significant gains at the start of the week, appreciating in both the official and parallel foreign exchange markets as the gap between the two narrowed. This movement reflects growing market stability and efforts by authorities to synchronize exchange rates.

At the official segment of the Nigerian Foreign Exchange Market (NFEM), the naira rose by 0.59%, or N8, closing at N1,347.77 per dollar on Monday. This is an improvement from N1,355.41, which was recorded at the close of trading last Friday, signaling a modest but meaningful uptick for the local currency.

The parallel, or “black,” market also saw notable gains. Traders sold the naira at N1,385 per dollar at the close of business on Monday, compared with N1,420 over the weekend. This represents a 2.5% appreciation in just one day, demonstrating growing investor confidence and demand for the local currency.

The narrowing of the spread between the official and parallel rates is a key highlight for market observers. Last Wednesday, the gap stood at N92, reducing to N65 last Friday and further tightening to N38 by Monday. Analysts suggest this convergence signals a healthier forex environment and more efficient currency pricing across the country.

Market participants attribute the positive trend to the Central Bank of Nigeria’s (CBN) reopening of the retail forex window for Bureau De Change (BDC) operators, enabling them to access fresh dollar supplies. The move has bolstered liquidity, helping stabilize the naira while encouraging more uniformity between official and parallel market rates.

source: leadership