Black Market Traders Sell Dollar at New Exchange Rate As CBN Stops Naira Depreciation

• There is relative calm for the naira in the NAFEX window, the official foreign exchange market for buying and selling dollars
• This follows the CBN’s decision to resume the sale of dollars to Bureau de Change operators with an exchange rate resell limit
• The CBN believes that this sale will boost liquidity and help ease the pressure the naira is facing in the FX markets

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The value of the Nigerian currency is appreciated against the US dollar in the official market, the Nigerian Autonomous Foreign Exchange Market (NAFEX).

According to data from the FMDQ Securities Exchange, the naira closing rate at NAFEX on Thursday, July 18, 2024, was N1,566.82/$1.

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The new exchange rate represents an improvement of N14.83 or 0.94% for the naira compared to N1,581.65/$1 on Wednesday, July 17.

The appreciation of the naira is attributed to the Central Bank of Nigeria (CBN) intervention in the FX market to stabilize the exchange rate.

During trading on Thursday, forex turnover significantly increased by 152.5% or $164.98 million, rising to $273.14 million from the preceding session’s $108.16 million.

Naira to Pound, Euro

However, it was a different story for the naira as it depreciated further against the pound sterling and the euro in the official market.

CBN data shows that on Thursday, the naira fell against the pound by N26.60, closing at N2,063.96/£1 compared to N2,037.36/£1.

Against the euro, the naira depreciated by N21.78, trading at N1,733.23/€1 compared to the previous day’s N1,711.45/€1.

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Naira to dollar black market

Black market traders also quoted a new exchange rate, selling the dollar as high as N1,635/$1 on Thursday compared to the previous rate of N1,615/$1.

This exchange rate is likely to change in the coming days.

CBN hopes to crash dollar

Earlier, Legit.ng reported that the CBN carried out another round of forex sales on Thursday to licensed Bureau De Change Operators in the country.

Each BDC received $20,000 as the CBN bid to reduce the exchange rate at which the dollar is sold on the street.

The CBN also instructed that the BDCs resell to eligible end-users at a margin not more than 1.5 per cent above the purchase rate.

Source: Legit.ng