N1,300/$: Current Naira Rate in the Parallel Market
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News - October 27, 2023

N1,300/$: Current Naira Rate in the Parallel Market

In recent developments, the Nigerian currency showed mixed reactions across different trading platforms. The naira rate experienced an appreciation in the parallel market, strengthening to N1,300 per dollar, a slight improvement from its previous rate of N1,305 per dollar on Wednesday. This gain, albeit marginal, paints a hopeful picture for traders and consumers alike.

Conversely, on the official front, the naira rate didn’t fare as well. Data sourced from FMDQ indicates a downturn for the currency within the Nigerian Foreign Exchange Market (NAFEM). 

The naira rate depreciates with a wide margin

The naira rate depreciated significantly to N837.49 per dollar, showing a marked difference from its N801.1 per dollar position on Tuesday. This shift represents an N36.39 drop in the naira rate within the I&E window.

One silver lining amidst these fluctuating naira rate figures is the narrowing gap between the official and parallel market exchange rates. Yesterday’s records showed a gap of N462.51 per dollar, which, when compared to Wednesday’s N496.9 per dollar, indicates a positive trend.

While these figures provide a snapshot of the naira’s current standing, they underscore the ongoing complexities within Nigeria’s foreign exchange market. As economic stakeholders monitor the situation, the naira rate remains a focal point for the nation’s financial future.

What to note 

The naira experienced a significant decline on Tuesday, dropping to a record low of N1,310 per dollar in the parallel (black) market. This comes after a previous closing at N1,235 per dollar on Monday. Additionally, the currency weakened by 6.86% at the Nigerian Autonomous Foreign Exchange Market (NAFEM) where it traded at N847.77 per dollar, showing further depreciation from its earlier positions. 

Finance Minister Wale Edun mentioned an expected $10 billion foreign currency inflow in the coming weeks which could alleviate the dollar scarcity. Despite this, Nigeria’s foreign reserves have shown a slight increase. Analysts anticipate stabilization of the naira rate if the projected inflows materialize.

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