In a surprising shift in the foreign exchange landscape, the Naira has gained significant ground against the U.S. Dollar in the parallel market, leaving traders and investors taking note of the remarkable movement in this week's trading.
On Thursday, February 5th, the Naira strengthened against the Dollar, marking its largest daily gain in the parallel market. According to a Bureau de Change (BDC) operator in Wuse Zone, Abuja, the Naira rose to N1570 per Dollar—an improvement from the previous day's rate of N1590. This gain of N20 within a single day is the highest appreciation seen in the black market since the start of the week, signaling a notable shift in the Naira's performance.
However, the official market painted a different picture. On the same day, the Naira dipped to N1,500.41 per Dollar, a slight drop from the previous day's value of N1,499.76. This divergence between the parallel and official markets has raised questions among economic experts, as the Central Bank of Nigeria (CBN) continues to exert control over the exchange rate through various monetary policies.
The fluctuation comes in the wake of the CBN’s recent measures to tighten oversight on Bureau de Change operators. The apex bank’s Trade and Exchange Department introduced a new cap on the amount of foreign currency sold to BDC operators, limiting the weekly sales to $25,000. This move aims to bring stability to the foreign exchange market while curbing speculation and volatility in the Naira's value.
Thursday's trading results reflect a 20 Naira improvement in the parallel market while a slight dip in the official rate suggests ongoing challenges within Nigeria's foreign exchange policy. As the CBN continues its efforts to stabilize the Naira, market watchers are keenly observing how these developments will unfold in the coming weeks.
This fluctuation in the value of the Naira demonstrates the delicate balance between government policies and market forces and highlights the ongoing importance of reforms to strengthen the nation's currency.
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