Dollar Sells Cheaper in Black Market as CBN Begins New FX Trading System
- The naira appreciated in the parallel market on Monday, December 2, 2024, relative to the previous trading day
- Data obtained from the streets shows that the local currency traded at N1,730 per dollar as against the N1,750 it traded previously
- However, the naira’s value fell in the official foreign exchange window by 1,69%, to N1,672.69 against the N1,644 per dollar
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
On Monday, December 2, 2024, the Nigerian currency rose against the US dollar in the parallel market as the first FX trading day began on the Electronic Foreign Exchange Matching System (EFEMS) through the Bloomberg BMatch System.
The naira gained N20 as the US greenback traded at N1,730 against N1,750 on Friday, November 29, 2024, in the parallel market.
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CBN begins new FX trading platform
Last week, the Central Bank of Nigeria (CBN) issued a directive asking all banks operating in the interbank foreign exchange market to move to the Bloomberg BMatch System for FX trading.
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The implementation of the BMatch system went live on Monday, December 2, 2024. The platform enhances Nigeria's FX market's operational efficiency and transparency.
Naira depreciates in official window
However, the naira fell 1.69% in the official foreign exchange window as traders quoted the dollar at N1,672.69 on Monday, December 2, 2024, as against the N1,644 it traded on Friday, November 29, 2024.
In the official window, also known as the Nigerian Autonomous Foreign Exchange Market (NAFEM), the average daily turnover increased by 16% monthly to $365.2 million.
Consequently, the naira dropped in value by 0.3% monthly against the dollar, trading at N1,672.69 to a dollar.
Experts project excellent outlook for naira
Experts say the naira is expected to maintain a positive movement, supported by improved confidence in the FX market, rising reserves, and enhanced market liquidity.
Abbas Yishau, a parallel market FX trader, disclosed to Legit.ng that the US dollar was ample in the parallel segment of the FX market on Monday, December 2, 2024, which led to a positive outcome.
“We had somewhat relative access to forex the previous week, which is why the naira performed better. However, we are still expecting the CBN to conduct another round of FX sales to help the naira to appreciate further,” he said.
Dollar supply in the foreign exchange market grows 226%
Legit.ng earlier reported that the Nigerian Autonomous Foreign Exchange Market (NAFEM) daily turnover rose 226% in the first six months of 2024 relative to the previous year, demonstrating the success of reforms.
The development comes as the CBN asked customers to report cash withdrawal challenges in any bank beginning December 1, 2024, amid an ongoing cash crunch.
The governor of CBN, Olayemi Cardoso, stressed penalties for failing to ensure cash availability, highlighting a 72% increase in foreign portfolio inflows and a growth in forex reserves from $32 billion to over $40 billion FX reserves, the highest in three years.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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