Naira Weakens against Dollar in Official Market, Strengthens in Black Market after CBN Rule Change
- The naira has depreciated once again against the United States dollar in the foreign exchange markets
- New data shows that the naira weakened in the official market but improved in the black market exchange
- The CBN recently released a new foreign exchange guideline for players and hopes that it helps the naira
The Nigerian naira ended November 2024 at a low against the US dollar (N1,672.69/$1) in the official foreign exchange market.
This is according to the FMDQ Securities Exchange, looking at data from the Nigerian Autonomous Foreign Exchange Market (NAFEM).
Source: Getty Images
The exchange rate on the last trading day of the month - November 29, 2024 - represents a depreciation of 1.7% or N27.83 compared to N1,644.86/$1 as of Thursday, November 26, 2024, and comes amid a decline in forex transactions from banks and authorised dealers.
FMDQ data showed that the value of forex transactions at the end of November 2024 dropped significantly by 56.7%, or $306.24 million, to $254.10 million from $560.34 million the day before.
Naira's rate against pound, euro
However, it was a different story for the Nigerian currency compared to the British pound sterling and euro in the official market.
The CBN reports that the naira gained improved the pound by N13.38 to N2,111.48/£1 compared with the previous day’s N2,124.86/£1.
Nigeria's currency also gained N15.61 against the euro to finish at N1,757.57/€1, compared to Thursday’s closing price of N1,773.18/€1.
Naira to dollar rate in black market
Meanwhile, traders told Legit.ng that the naira appreciated against the dollar by N15 in the black market.
Abdulahii, a BDC trader, commented:
"Naira improved on Friday as we exchanged one dollar at N1,735/$1 compared with Thursday’s closing price of N1,750/$1."
The CBN's EFEMS initiative, aimed at promoting transparent, fair, and efficient FX trading, minimising counterparty risks, and ensuring compliance with regulations, is set to go live today (December 2, 2024).
Legit.ng reported that the Nigerian apex bank has pegged the minimum tradable amount at $100,000, with incremental clip sizes of $50,000 in a bid to promote transparency and efficiency in forex.
CBN hopes for new naira-to-dollar exchange rate
Legit.ng earlier reported that the CBN revealed that Nigeria's foreign reserves increased.
This came after the successful $500 million bond issuance, which signifies investor confidence.
A shortage of forex has always been a major reason for pressure on the naira in all markets.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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Source: Legit.ng
