Naira eyes N1,300/$ at parallel market as speculators offload FX

The naira rebounded against the United States dollar at the official and parallel markets, with the local currency recording a significant gain against the greenback at the black market.

On Wednesday, the naira closed trading at 1,410/dollar at the parallel market and N1,492 at the official Nigerian Autonomous Foreign Exchange Market, according to data compiled from the FMDQ Securities Exchange.

This came as the Central Bank of Nigeria, CBN, announced the final settlements of all valid foreign exchange backlogs, fulfilling a key pledge of the apex bank governor, Mr. Olayemi Cardoso, to process an inherited backlog of $7bn in claims.

The Acting CBN Director, Corporate Communications, Mrs. Hakama Sidi Ali, who disclosed this in Abuja on Wednesday, recalled the central bank had recently cleared $1.5bn from the backlogs.

The gain recorded by the naira at the official market represents an appreciation of N68 or 4.5 per cent, from the N1,560/$1 recorded on Tuesday at NAFEM, and a gain of 13.5 per cent or N190 at the parallel market.

READ ALSO: Binance ceases naira services amid regulatory conflict

Some dealers proposed that the dollar could hit N1,200/$ in a matter of days. At the current rate, Nigeria is trading at a discount on the parallel market exchange for a dollar at higher rate than at the official Nigerian Autonomous Foreign Exchange market.

Days after the market was liberalized last year, similar parity was achieved but the arbitrage started a gradual formation that saw it reaching 50 percent at some point.

On the Peer-to-peer,P2P, platform, which the federal government partly blamed for the woes the local currency faced in recent times, Naira traded yesterday around N1200 for usdt, stable coin pegged on dollar at an exchange rate of one-for-one.

Binance, the global digital currency exchange shut down it P2P after a faceoff with the federal government. However, traders have long embraced other platforms for their trading activities.


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