The Nigerian Naira experienced a significant appreciation against the US Dollar in the official market, closing at N1,339.33/$1 on Monday. This marks a 9% increase from the previous Friday’s rate of N1,482.81/$1 and is the highest closing rate since April 26, when it stood at N1,339.23/$1, according to data from FMDQ.
The surge in the naira’s value came despite a sharp decrease in foreign exchange (FX) turnover, which fell by 67.50% to $180.8 million on Monday from $556.25 million on Friday. The lower turnover indicated reduced demand for dollars, contributing to the naira’s strength.
In contrast, the parallel or black market saw the naira weaken further. On Sunday, the exchange rate at the Lagos Street market was N1,515 for buying and N1,520 for selling. By Monday, traders were quoting the Naira at N1,490 for buying and N1,520 for selling, reflecting a decline from N1,510/$1 traded on May 24.
However, the Central Bank of Nigeria (CBN) does not recognise the parallel market and warned individuals to conduct foreign exchange transactions through their banks.
While the official market shows a positive trend for the naira, the parallel market remains volatile. Overall, the naira has remained unstable, mostly depreciating due to inconsistent government policies and the depletion of foreign exchange reserves.
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