Dollar Crashes Again: Official, Black Market Exchange Rates Now Equal

• The CBN's recent policies have finally helped the naira exchange rate converge in the foreign exchange markets
• New data shows that naira in the official and unofficial forex market is now selling at the same rate
• The apex bank will be hoping to sustain the momentum as the market continues to react to its new policies

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 naira against the US dollar is being exchanged at the same rate in both the official and unofficial markets.

Checks by Legit.ng showed that the naira was quoted by traders at N1,510 in the parallel market on Thursday, February 20, matching the official exchange rate of N1,510/$ recorded on Wednesday.

Some traders set their buying rate for the dollar as low as N1497.

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BusinessDay reports that the current rate in the black market brings the naira’s year-to-date gain to N155/$ or 10.3%, compared to N1,665 quoted at the beginning of the year.

Naira exchange rate in the official markets:

• CFA - N2.40
• Yuan/renminbi - N207.16
• Danish krona - N211.09
• Euro - N1,574.83
• Yen - N9.98
• Riyal - N402.36
• South African rand - N81.26
• Swiss franc - N1,671.32
• Pounds sterling - N1,901.09
• US dollar - N1,509.04

CBN speaks on naira improvement

Olayemi Cardoso, governor of the CBN, confirmed that the exchange rate difference was now less than 1% at the last count.

This was not an easy achievement, as the apex bank had to introduce several policies in the last month to stabilise the naira.

First, it was the Electronic Foreign Exchange Matching System (EFEMS), designed to match buy and sell orders automatically while also enhancing transparency and governance in FX trading.

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The CBN introduced the FX code, which guides the practices of players in the forex market.

Furthermore, the CBN extended the deadline given to Bureau de Change operators to buy dollars from the official market.

CBN MPC committee spoke on the exchange rate convergence.

"The Committee highlighted the benefits of improvements in the external sector for exchange rate stability, including the convergence of rates between the Nigerian Foreign Exchange Market (NFEM) and the Bureau de Change (BDC). It urged the Bank not to relent in its efforts to boost market liquidity.

"In this regard, the Committee acknowledged recent measures introduced by the Bank, such as the Electronic Foreign Exchange Matching System (B-Match) and the Nigerian Foreign Exchange Code, to foster transparency, ethics, and credibility in the market.

Thus, the MPC believes that, following major policy measures undertaken by the monetary and fiscal authorities, the flow of foreign direct and portfolio investments, as well as diaspora remittances, is expected to increase as investor and stakeholder confidence improves."

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New exchange rate as dollar crashes again in official, black forex market

CBN retains interest rates

Legit.ng reported that the CBN's Monetary Policy Committee (MPC) retained its benchmark interest rate, known as the Policy Rate (MPR), at 27.5%.

This decision to retain the interest rate follows NBS releasing a rebased consumer price index (CPI)

The CBN decision implies that Nigerian banks will retain the interest rates on lending and savings to customers.

Proofreading by Nkem Ikeke, journalist and copy editor at Legit.ng.

Source: Legit.ng