The Naira Strengthens: Now ₦1,640 per Dollar in the Parallel Market
The recent appreciation of the Naira to ₦1,640 per dollar in the parallel market marks a significant improvement from ₦1,655 recorded on Monday, January 29. This positive trend reflects ongoing exchange rate reforms by the Central Bank of Nigeria (CBN).
According to data from the CBN, the Nigerian Foreign Exchange Market (NFEM) rate has also seen an improvement, rising to ₦1,526.3 per dollar from ₦1,533.5 per dollar earlier this week, indicating a gain of ₦7.2.
Consequently, the gap between the parallel and official market rates has narrowed to ₦113.7 per dollar, down from ₦121.5 per dollar at the beginning of the week.
The stability of the Naira over the past months can be largely attributed to the CBN’s strategic policy interventions. These include the introduction of the Electronic Foreign Exchange Matching System (EFEMS) in December and the upcoming FX code, which is set to launch by the end of January.
Taiwo Oyedele, Chairman of Nigeria’s Fiscal Policy and Tax, emphasized the impact of these reforms, stating, “The new FX code introduced by the CBN will enhance transparency, and about $20 million is being taken off the market daily.”
CBN Governor Olayemi Cardoso reiterated the institution’s dedication to stabilizing the currency, pointing out that last year’s depreciation has now opened up investment opportunities.
“We’ve found ourselves in a situation where the foreign exchange rate has adjusted,” Cardoso mentioned during a virtual briefing with the Nigeria Economic Summit Group (NESG).
“This presents a chance for investors to take advantage of a currency that is now a lot more competitive.”
With ongoing reforms, market analysts predict further stability for the Naira, which is expected to boost investor confidence in Nigeria’s foreign exchange market.
