Dollar Sells at New Rates in Official, Parallel Markets after CBN’s Action
- The Nigerian currency, the naira, experienced a slight decline in the official foreign exchange market
- Information from the FMDQ Exchange shows that the naira exchanged at N1,659 from the N1,650 per dollar
- In the parallel segment of the foreign exchange market, the naira steadied at N1,750 per dollar, up from the N1,770 of the previous day
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The Nigerian currency, the naira, depreciated slightly in the official foreign exchange market on Wednesday, November 27, 2024, the day after the Central Bank of Nigeria (CBN) increased the monetary policy rate (MPR) by 25 basis points to 27.50%.
At the close of trading on Wednesday, November 27, 2024, the Nigerian currency depreciated marginally by 0.08% to trade at N1,659.44, down from the N1,650 it had traded the previous day.
Source: Getty Images
Demand for dollar declines in FX market
In the parallel segment of the foreign exchange market, the naira steadied at N1,750 per dollar, up from the N1,770 of the previous day.
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The value of the naira has remained unchanged despite the interest rates by the CBN.
According to FMDQ data, the FX market experienced lower demand, and FX supply declined by 20.9% to $337.07 million on Wednesday, November 27, 2024, in the official Nigerian Foreign Exchange Market (NAFEM).
With the current rate, the naira’s value has declined by 40.4% yearly from N988.46 in January, according to FMDQ data.
Experts predict new naira rates in 2025
Legit.ng earlier reported that Bismarck Rewane, the CEO of Financial Derivatives Company, predicted that the naira would depreciate by 36.50% yearly.
He said that inflation will cool, saying that it moderate at 16.2% by 2026.
Analysts have said that the predictions of further naira depreciation might occur unless the CBN defends the local currency.
“Right now, the naira is drifting endlessly, and it is subjected to high volatility due to increased FX demand,” Janet Ogochukwu, senior banker and economist, said.
She disclosed that the several predictions of the naira’s depreciation can only happen if the CBN refuses to intervene.
CBN mandates banks to move to a new FX trading platform
Legit.ng earlier reported that the CBN issued a directive on Tuesday, November 26, 2024, mandating all banks in the interbank FX market to move to the Bloomberg BMatch system for forex trading.
The apex bank said the implementation will begin on December 2, 2024, and is designed to boost operational efficiency and transparency of Nigeria’s forex system.
In the circular seen by Legit.ng, CBN said the BMatch platform provides an automated system for matching trades, boosting market integrity and facilitating better price discovery.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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