Dollar Crash Continues as Naira Gains in Official, Parallel Markets, Analyst Predict New FX Rates
- The naira continued its gains against the dollar in all markets, hitting N1,100 in the parallel market
- The Nigerian currency also gained in the official market, where it traded at N1,136.04 per dollar on Monday, April 14, 2024
- Analysts have predicted that the naira will recover to N900 per dollar before the end of May if CBN continues its interventions
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Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The naira appreciated further on Monday, April 15, 2024, in the parallel market as Bureau de Change Operators (BDCs) anticipated another round of FX sales by the Central Bank of Nigeria (CBN).
The apex bank sold foreign exchange to the operators last week at N1,101 per dollar, rallying the local currency.
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Naira recovers in the black market
Black market traders quoted the naira at N1,100 to the dollar on Monday, April 15, 2024, as against the N1,150 they sold on Friday, April 12, 2024.
Reports say the operators quoted the dollar's buying rate at N1,070 and the selling price at N1,100, with a profit margin of N30.
The naira gained N50 against the dollar, or 4.34%, from the previous rate of N1,150 it traded on April 12, 2024.
The Nigerian currency also rallied against the US dollar at the FMDQ Exchange, where it traded N1,136.04 to the dollar against the N1,205.06 per dollar it traded on Friday, April 12, 2024.
Analyst predicts N900 to a dollar
The naira’s performance has surprised many, with Goldman Sachs naming it the best-performing currency in the world in April.
The bank said the Nigerian currency will recover below N1,000 per dollar in 2024.
Economist and banker Jonathan Ugwu said the naira recovery will continue following the CBN's series of interventions, especially selling forex to BDCs.
“I think the CBN has been putting the wind out of the sails of speculators responsible for the naira crash since the beginning of this year.
“These interventions by the CBN, especially to the BDCs, are a masterstroke that has destroyed the plans of currency racketeers.”
Ugwu said that the naira’s recovery will continue, and it may finally settle at about N900 per dollar.
“I think the aim should be around N900 per dollar; anything below that will scare away investors. There is a lot of confidence in the foreign exchange market, especially after the CBN settled all the FX backlogs to foreign airlines and others.
He said the CBN's actions have led to foreign airlines unblocking cheap tickets for Nigerians and crashing airfares.
CBN begins another round of FX sales to BDCs
Legit.ng earlier reported that on Friday, the naira's value increased to N1,150 per dollar on the parallel foreign exchange (FX) market.
Currency dealers, often called Bureau de Change (BDC) operators, quoted the US dollar purchase rate at N1,110 and the selling price at N1,150, yielding a profit margin of N40.
From the N1,160 registered on April 11, the naira appreciated by 0.86 on Friday, April 12, 2024.
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Source: Legit.ng
