Naira strengthens against dollar at parallel, official markets

The naira appreciated further to N1,490 per dollar at the parallel section of the foreign exchange (FX) market on Monday.

The FX rate is a 1.34 percent increase from the N1,510/$ recorded on May 17.

Currency traders in Lagos, also known as bureau de change (BDCs) operators, quoted the buying rate of the greenback at N1,450 and the selling price at N1,490 — leaving a profit margin of N40.

At the official section of the FX market, the local currency appreciated by 1.93 percent to N1,468.99/$ on Monday — from N1,497.33/$ traded on May 17.

Also, the naira depreciated as low as N1,550/$ during intra-day trading and appreciated as high as N1,400/$.

On May 20, Agora Policy, an Abuja-based think tank, said Nigeria needs a temporary dollar liquidity bridge or FX inflows for the orthodox reforms of the Central Bank of Nigeria (CBN) to take effect.

Advising the financial regulator, the think tank said eurobond issuance, assets sale, and engaging multilateral agencies, could boost dollar inflows into the country.

Over the medium term, Agora Policy said Nigeria must prioritise restoring organic dollar flows from oil exports by clearing the backlog of encumbrances.

Furthermore, the organisation said monetary policy must strike a balance between exchange rate stability — which is vital for near-term inflation — and non-mineral export competitiveness in a small open economy like Nigeria.