Naira appreciates to N740/$ at parallel market as FX demand slows

The naira, on Wednesday morning, appreciated to N740 per dollar at the parallel section of the foreign exchange (FX) market, popularly called the black market.

The figure signifies a N10 or 1.3 percent gain compared to the N750 it traded last week.

Bureaux De Change operators (BDCs) who spoke to TheCable said they purchase the greenback at N725/$, make a gain of N15 and then sell at N740/$.

The street traders attributed the appreciation of the currency to moderation in demand for dollars by importers and a slight improvement in supply during the festive season.

“We have dollars and people are coming to buy. But the customers are not buying plenty dollars,” a BDC operator at Alade Market in Ikeja, Lagos, told TheCable.

Meanwhile, at the investors and exporters (I&E) forex window, the local currency depreciated by 0.05 percent to N456.50/$ on Friday (the last trading day), according to data from the FMDQ OTC Securities Exchange — a platform that oversees official foreign exchange trading in Nigeria.

A total of $155.86 million was traded at the exchange last Friday — a 39.95 percent increase compared to the $111.37 million recorded on Thursday.

Last year, the Central Bank of Nigeria (CBN) stopped FX allocation to BDC operators.

Godwin Emefiele, CBN governor, said the black market traders turned away from their objectives to become money laundering agents.

The apex bank later commissioned deposit money banks (DMBs) to cover the expected demand from the public.

But the banks have been struggling to meet demand as forex shortage continues to take a toll on businesses, especially importers and manufacturers.