In a surprising turn of events, Nigeria’s currency, the naira, experienced a significant surge of 5.93 percent on the parallel market, commonly known as the black market. On Monday, the local currency traded at a rate of N1,350 against the US dollar, marking a notable improvement from the N1,430 exchange rate recorded on Friday.
Currency traders attribute the naira’s appreciation to a decline in demand for the US dollar, which was notably scarce on Friday due to a shortage of dollar availability in the market. This moderation in demand appears to have bolstered the value of the naira against the dollar, reflecting a positive sentiment among market participants.
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Meanwhile, at the Nigerian Autonomous Foreign Exchange Market (NAFEM), the naira experienced a modest depreciation of 2.24 percent. Data released by the FMDQ Securities Exchange revealed that the dollar was quoted at N1,339.23 on Friday, compared to N1,309.88/$1 quoted on the preceding Thursday.
Despite the slight depreciation at NAFEM, the intraday high for the naira closed at N1,410 per dollar on Friday, demonstrating a strengthening compared to the previous day’s closure at N1,435. Similarly, the intraday low appreciated to N1,051 per dollar, showcasing an improvement from the low of N1,100/$1 recorded during spot trading on Thursday.
Moreover, the supply of dollars by willing buyers and sellers experienced a marginal decline of 2.85 percent, amounting to $309.01 million on Friday, compared to $318.08 million recorded on Thursday.
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This sudden surge in the value of the naira on the black market reflects a positive sentiment and suggests a potential stabilization in the foreign exchange market. As market dynamics continue to evolve, stakeholders remain attentive to further developments and their implications for the broader economic landscape.