Nigerian Naira appreciates to N1,250 per Dollar at parallel FX market amidst stability efforts

On Monday, the Nigerian naira demonstrated a positive trend, appreciating to N1,250 per dollar at the parallel segment of the foreign exchange (FX) market. This represents a 0.43 percent increase from the rate of N1,280 recorded on March 29.

Currency traders, operating mainly as bureau de change (BDCs) operators in Lagos, quoted the buying rate of the dollar at N1,230, while the selling price stood at N1,250, leaving a profit margin of N20. Aliyu, a currency trader, acknowledged the dollar’s continual decline, impacting business activities, albeit noting a gradual improvement in business conditions.

Conversely, at the official segment of the FX market, the local currency experienced a depreciation of 0.69 percent, settling at N1,309.39/$ on March 28, down from N1,300.43/$ on March 27.

Meanwhile, Aminu Gwadabe, the President of the Association of Bureau de Change Operators of Nigeria (ABCON), highlighted on March 31 that the reintroduction of BDCs into the mainstream FX market has contributed to stability in the exchange rate. This move has effectively curbed illegal economic practices such as hoarding, rent-seeking, round-tripping, and speculative FX holding. Gwadabe emphasized that this development has led to exchange rate convergence.

Moreover, Gwadabe pointed out that the increased inflows of foreign exchange through the Central Bank of Nigeria’s monetary instruments have bolstered foreign reserves. This, in turn, has empowered the apex bank to defend the local currency effectively amidst prevailing economic dynamics.