Business

Naira appreciates at parallel market, now N925/$1

Published

3 years ago

August 16, 2023

Naira appreciates at parallel market, now N925/$1

The plan by the Central Bank of Nigeria (CBN) to intervene in the continued fall of the naira against foreign currencies made a positive impact on the naira as the Naira appreciated against the dollar at the parallel market, also known as Black Market on Tuesday.

The naira, which had exchanged against the dollar at N956/$ on Monday, exchanged for N925/$ on Tuesday.

Sources at the parallel market said they bought and sold naira at “lN915/$ and N925/$.

On the Investors & Exporters window, trading of the naira commenced at 785.89/$ and reached a high of 799.90/$ before closing at 774.77/$ on Tuesday; it closed at 764.68/$ on Monday.

Recall that the acting Governor of the CBN, Folashodun Shonubi, on Monday, while speaking after briefing President Bola Tinubu on what the bank was doing to halt the naira slide, said the fluctuation in the parallel market was not solely driven by economic factors, but also speculative demand.

Shonubi said the apex bank has come up with a yet-to-be-announced policy that will wipe out the disparities between the official and black market rates.

The black market rate fell to as low as N950/$1 last week, opening up about N200 disparity with the I&E window as demand continued to outstrip supply. Meanwhile, the official rate averaged N765/$1.

He insisted the fluctuations in the parallel market are not solely driven by economic factors of demand and supply, but also by speculative demand.

Shonubi said, “We do not believe that the changes going on in the parallel market are driven by pure economic demand and supply, but are touched by speculative demand from people.

“Some of the plans and strategies, which I’m not at liberty to share with you, means sooner rather than later, the speculators should be careful because we believe the things we’re doing, when they come to fruition, may result in significant losses to them.