Naira Recovers After Crossing The N1,600 Mark in Official And Black Markets
- The naira bounced back from the N1,600 threshold on Thursday, August 29, 2024, to trade at N1,593.94 in the official market
- The Nigerian currency plunged to N1,606 per dollar on Wednesday, August 28, 2024, sending a worrying signal into the market
- The local currency also appreciated in the parallel market, closing at N1,615 per dollar
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment, and the economy for over a decade.
The Nigerian currency, the naira, made a fantastic recovery in the official and parallel markets after crossing the N1,600 ceiling on Wednesday, August 28, 2024.
The local currency’s plunge below the N1,600 mark sent shockwaves into the market as efforts by the Central Bank of Nigeria (CBN) to stem the free fall of the naira seem to have waned after embarking on the Retail Dutch Auction System (rDAS), earlier in the month.
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The naira recovers in the official market
However, on Thursday, August 29, 2024, the naira bounced back, closing at N1,593.33 per dollar, marking a departure from the N1,606 it traded the previous day.
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Data from the FMDQ Exchange shows that currency traders quoted the naira’s spot rate at a high of N1,612 per dollar and a low of N1,499.
Foreign exchange turnover in the official market dropped by 3.3% to $155.52 million from the $160.94 million recorded the previous day.
The gap between official and parallel markets grows
The naira also recovered in the parallel market, known as the black market, closing at N1,615 per dollar, down from the N1,620 quoted on Wednesday, August 28, 2024.
Consequently, the gap between the parallel and official markets grew to N21.07 per dollar from N13.41 recorded the previous day.
FX volatility continues as turnover rises
Legit.ng earlier reported that the foreign exchange turnover in July 2024 stood at N11.48 trillion, about $7.39 billion at the official trading window for the Nigerian currency, higher than the N10.01 trillion recorded in June.
The development was disclosed in the monthly report for July published by the FMDQ Exchange Limited.
In dollar terms, forex market turnover in July recorded a 10.02% monthly increase from $6.72 billion the month before.
However, reports say the naira dipped in value, with the spot rate rising by 4.88% to N72.58, closing at N1,560 per dollar in July from N1,487.74 in June.
Exchange rate volatility also rose in July as the local currency traded at about N1,500.32 to N1,621.12, compared to the N1,473.66 to N1,510.10 it traded in June 2024.
At the end of the week, the naira’s value to the dollar appreciated to N1,570.14 per dollar, closing the week at NAFEM
CBN adjusts exchange rates for Customs duty
Legit.ng earlier reported that the CBN had adjusted the foreign exchange rates for cargo clearance in Nigerian ports.
The development follows the naira's crash to a four-month low in the official window on Tuesday, July 30, 2024.
Data from the Customs trade portal shows that the CBN hiked the Customs exchange rates to N1,610.417 per dollar from N1,601.84.
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