Naira continues its rebound against the dollar at parallel market, now below N1,300/$

The naira has continued its recovery against the US dollar at the parallel market as it appreciated to N1280/$1 on Saturday, according to information obtained by Nairametrics from some currency traders.

This represents an N120 or 8.57% gain when compared to N1,400 to a dollar that it traded the previous day.

However, some currency traders reported that they sold for between N1,300 and N1,320 to the dollar, noting that they cannot guarantee what the rate will be on Monday next week due to the volatile nature of the market.

Two days ago, the local currency was reported to have lost a third of its value barely 2 weeks after strengthening to below N1000 against the US dollar. It dropped to N1,450 against the US dollar at the black market on reports of fresh demand pressure.

Currency traders have attributed the recent depreciation of the naira to market forces as supply has been unable to meet up with the demand.

Meanwhile, data from FMDQ shows the naira continued its downward trend against the greenback at the official foreign exchange window, closing at N1,339.23/$1 on Friday, April 26.

This represents a 2.24% depreciation when compared to the N1,309.88/$1 that was reported the previous day.

The local currency has been on a seven-day losing streak at the official market, the longest since its crash in January, with a marginal 0.1% drop against the dollar also reported on Thursday.

Fighting to stabilize the naira

Even the sales of $15.83 million to 1,583 Bureau De Change (BDC) operators by the Central Bank of Nigeria (CBN) appear to have no impact on the official market.

The apex bank had on Monday announced the sales of $10,000 to these CBN licensed currency traders nationwide at a rate of N1,021/$1 as part of its plans to aid foreign currency accessibility for qualified end users and stabilize the foreign exchange market.

The Economic and Financial Crimes Commission (EFCC) had 4 days ago revealed that it has frozen over 300 accounts on suspicion of being linked to illicit forex trading which would have led to the crash of the naira within the next one week.

The EFCC Chairman, Ola Olukoyede, during an interactive session with editors and Abuja bureau chiefs of some media organizations in Abuja, said the anti-graft agency had discovered another worse scheme other than the crypto trading platform, Binance, within its system.

On April 23rd, the CBN lowered the foreign exchange rate for dollar distributions to BDCs, offering $10,000 at N1,021 per dollar, which is roughly 21% below the official rate reported by FMDQ. The move was aimed at enhancing liquidity in the unofficial market.

These CBN’s initiatives have tempered forex scarcity, aiding the naira’s recovery from an early March rate of N1,617 per dollar to N1,072 per dollar on the 17th of April.