Naira strengthens to ₦1,640/$ in parallel market

The Nigerian naira has appreciated in the parallel market, strengthening to ₦1,640 per US dollar from ₦1,655 recorded on Monday.

Similarly, official data from the Central Bank of Nigeria (CBN) indicates that the exchange rate in the Nigerian Foreign Exchange Market (NFEM) improved to ₦1,526.3 per dollar, compared to ₦1,533.5 on Monday—reflecting a ₦7.2 gain for the local currency.

As a result, the gap between the parallel market rate and the NFEM rate has narrowed to ₦113.7 per dollar from ₦121.5 earlier in the week.

This development follows a period of significant volatility, particularly over the past 18 months. However, since December, the naira has shown signs of stability, fluctuating within a relatively narrow band of ₦1,550 to ₦1,520 per dollar.

Market analysts attribute this steadiness to ongoing reforms introduced by the CBN. Key measures include the implementation of the Electronic Foreign Exchange Matching System (EFEMS) in December and the anticipated launch of the FX Code at the end of January.

Taiwo Oyedele, chairman of Nigeria’s Fiscal Policy and Tax Committee, noted that the new FX Code would improve market transparency, adding that approximately $20 million is being withdrawn from the market daily.

CBN Governor Olayemi Cardoso highlighted that recent foreign exchange reforms have enhanced the naira’s competitiveness, creating opportunities for investors. Speaking at a virtual briefing hosted by the Nigeria Economic Summit Group (NESG), Cardoso remarked that the adjustment in the exchange rate presents an avenue for investors to capitalise on a currency that is now “a lot more competitive.”