Naira Gains Against Dollar, As Exchange Rate Falls In Black Market, Official Window

The exchange rate between the Naira and the United States Dollar (USD) depreciated on Monday, 30, January, 2023, on the back of a stronger local currency.

According to the exchange rate data obtained from the FMDQ Exchange, it was learnt that the Nigerian currency appreciated by 0.05 per cent.

It was gathered the Naira exchanged for the Dollar at N461.50/$1, indicating the cost of buying one American greenback fell by N0.25 kobo from the N461.75 kobo reported a day before.

However, before the exchange rate settled at N461.50 to a dollar on Monday, Prime Business Africa gathered from the FMDQ Exchange that it rose as high as N462/$1 and as low as N446.

Note that in the Bureau De Change window of the black market, the exchange rate between the Naira and the US Dollar was hovering around N751/$1 on Tuesday, 31, January, 2022.

A day before, the exchange rate in the parallel market was put around N752/$1, reflecting the Bureau De Change window brought down the cost of selling one Dollar to the public by N1. 

This indicates that the Naira appreciated higher in the black market than it did in the official market backed by the Central Bank of Nigeria (CBN). 

Based on the depreciation in the exchange rate, the Naira appreciated by 0.13 per cent in the Bureau De Change window, compared to 0.05 per cent in the Investors and Exporters window. 

The Naira’s gain against the Dollar shows the pressure is subsiding, however, the exchange rate markets often experience fluctuation, which means the direction of the exchange rate can switch at any minute. 

Meanwhile, the Chief Executive Officer of Financial Derivatives Co Ltd, Bismark Rewane, has predicted that an inevitable exchange rate adjustment will drag the rate in the black market down by N680/$1 in 2023. 

“In 2023, exchange rate adjustment is inevitable, and when this happens and there are fewer administrative controls in the forex market, there will be more investment flows into the economy, which will help Naira defend against the dollar,” Rewane said.