The Naira continued its upward trend, reaching its highest level in seven months in the parallel market, where it appreciated to N1,500 per dollar from N1,530 per dollar recorded last weekend. The last time the currency traded below N1,500 per dollar in the parallel market was on June 21 last year, when it stood at N1,495 per dollar.
However, in the Nigerian Foreign Exchange Market, the Naira depreciated slightly to N1,504 per dollar. Data from the Central Bank of Nigeria (CBN) showed that the indicative exchange rate for the Naira rose to N1,504 per dollar from N1,502.5 per dollar last weekend, reflecting a depreciation of N1.5.
For the first time in a long period, the parallel market exchange rate was lower than the official rate, causing the gap between the two to shrink to minus N4 per dollar from N27.5 per dollar last Friday.
Analysts at Cardinalstone Research confirmed this trend in their forex market review, stating that the FMDQ FX rate weakened by 0.17 percent to N1,503.63 per dollar, while the parallel market rate strengthened by 0.67 percent to N1,500 per dollar.
As a result, the Naira has appreciated by 9.4 percent in the parallel market and 2.2 percent in the official market from N1,655 per dollar and N1,538.5 per dollar, respectively, recorded at the end of last year.
Currency traders attributed the sustained appreciation of the Naira to an improved supply of dollars despite high demand. A currency dealer, Yinusa Sadiq, noted that the availability of dollars from banks and Bureau de Change operators had contributed to the strengthening of the local currency.
“The Naira has been appreciating since last week due to increased dollar supply, even as demand remains high. Dollars are now more accessible through banks and Bureau de Change operators. Today, the exchange rate closed between N1,510 and N1,500, and I bought a dollar at N1,490,” he said.
Another trader, Rasaq Bello, predicted that the Naira would continue to appreciate and remain stable between N1,490 and N1,500 per dollar as long as the dollar supply keeps rising.
“If the dollar supply keeps increasing, I expect the exchange rate to stabilize between N1,490 and N1,500 per dollar this week,” he projected.
Similarly, analysts at Cowry Asset Management Limited anticipate that the Naira will maintain a stable trajectory against the dollar this week, barring any major market disruptions.
“This week, the Naira is expected to trade within a relatively stable range, provided there are no significant market distortions. Market dynamics will continue to shape the supply and demand for the dollar, influencing the local currency’s performance across various exchange segments,” they stated.
