In a notable turn of events on Monday, the Naira exhibited remarkable strength in the official exchange market while the United States Dollar (USD) soared in the Black Market
The official exchange rate for the USD closed at N773.98/$1, marking a substantial increase of N17.07 kobo compared to Friday’s rate of N756.91/$1. This shift also resulted in a 2.25% dip in the value of the Naira.
Foreign exchange data sourced from FMDQ Exchange reveals that the day’s highest rate reached N799.90/$1, while the lowest USD exchange rate was N700/$1.
Investors and exporters in this market segment conducted transactions totaling $64.22 million, a significant uptick from the $45.88 million reported on the previous Friday.
The surge in activity translated into a substantial 39.9% increase in the total value of foreign exchange transactions between Friday and Monday, equating to a remarkable $18.34 million in additional forex supply.
However, in the Bureau De Change (BDC) window of the black market, the USD was traded at an average rate of N960/$1 on Monday, as reported by the parallel window aggregator, AbokiFX. In this segment, the pound was exchanged at N1220/£1, while the euro was valued at N1020/€1.
The unexpected surge of the USD in the official market, coupled with increased transaction volumes, signifies a potential shift in the foreign exchange landscape.
Factors contributing to this surge may include changes in market sentiment, global economic conditions, and central bank interventions.
Despite the robust performance of the USD in the official market, the parallel market continues to exhibit significant deviations in exchange rates, reflecting the persisting challenges in the foreign exchange sector.
The BDC window’s average rate of N960/$1 underscores the ongoing disparity between official and parallel market rates.
The recent fluctuations in the Nigerian foreign exchange market highlight the need for continued vigilance and adaptability among market participants. The USD’s surprising rally, coupled with increased trading activity, suggests that the forex landscape remains dynamic and influenced by various factors.
Monitoring these developments will be crucial for businesses and investors navigating the ever-changing currency market.