The Nigerian naira experienced a surge in value against the US dollar in recent trading, with the parallel market witnessing an increase to N1,350 per dollar, marking a notable rise from the N1,430 recorded just the day before.
Similarly, within the Nigerian Foreign Exchange Market (NAFEM), the naira strengthened to N1,382.95 per dollar, according to data from FMDQ, showcasing a significant improvement from previous rates. This positive shift reflects a broader trend, with the indicative exchange rate for NAFEM dropping from N1,408.04 per dollar on Monday, representing an impressive N25.09 appreciation for the naira.
This upward trajectory has led to a noticeable divergence between the parallel market rate and NAFEM, with the margin widening to N32.95 per dollar, up from N21.96 per dollar previously.
Over the past month, the Nigerian naira has displayed remarkable resilience, witnessing a surge of 18.28 percent. From its low of N1,665.50 on February 23, 2024, the currency has climbed to N1,408.04 on Monday, as per data compiled from the FMDQ Securities Exchange.
The recent strengthening of the naira can be attributed to a series of foreign exchange reforms implemented by the Central Bank of Nigeria (CBN). These reforms encompass various measures such as the consolidation of exchange rate windows, liberalization of the FX market, resolution of FX backlog obligations, and the implementation of a Price Verification System (PVS).
Moreover, the CBN has taken steps to bolster liquidity in the market by selling dollars to Bureau De Change (BDC) Operators at a favorable rate of N1,251, as outlined in a recent circular. BDCs have been instructed to sell to eligible customers within a specified range, ensuring greater accessibility to foreign exchange at competitive rates.