Naira closes at N756/$ as official, parallel market rates converge week after FX policy

The Nigerian naira strengthened on Tuesday to close at N756 to the dollar at the investors and exporters (I&E) window. 

According to FMDQ Securities Exchange Limited, the closing rate represents a 1.8 percent appreciation from the N770 recorded on Monday.

TheCable understands that FX rates converged at the official and parallel markets on Tuesday, a week after the government unified the exchange rate windows.

Bureau de Change (BDC) operators told TheCable that local currency traded between N754 and N757 to greenback in the parallel market.

The naira has consistently experienced fluctuations since the introduction of new policies by the Central Bank of Nigeria (CBN) which sparked significant volatility in the market.

The currency had traded at a record high of N791 before recovering to close at N663 hours after the CBN collapsed all FX windows into the I&E window last week.

“There is no way you can get a stable rate in the market. If I give you a rate now, in the next hour, it will change again,” a BDC operator said.

“This thing depends on demand and supply.”

Speaking on price stability, Kingsley Obiora, the deputy governor CBN, said the apex bank plans to implement more reforms in the next couple of weeks to reposition the local currency and relinquish more control.

The deputy governor said the foreign exchange market is already operating on a willing buyer, willing seller basis; stressing that the central bank “has not entered the market as a buyer or seller”.

“We are allowing the market itself to set a price,” he had said in a recent Bloomberg interview.

“The central bank expects official and parallel-market exchange rates to converge soon. I don’t think it will take a long time for that to happen.”