The Naira maintained its upward momentum in the parallel market, appreciating to N1,500 per dollar yesterday from N1,530 per dollar recorded over the weekend.
This marks its strongest position in the last seven months.
The last time the Naira traded below N1,500 per dollar in the parallel market was on June 21, 2024, when it stood at N1,495 per dollar.
Meanwhile, in the Nigerian Foreign Exchange Market (NFEM), the Naira saw a slight depreciation, settling at N1,504 per dollar.
Data from the Central Bank of Nigeria (CBN) indicated that the indicative exchange rate weakened to N1,504 per dollar from N1,502.5 per dollar recorded last weekend, reflecting a marginal decline of N1.5.
Notably, for the first time in a while, the exchange rate in the parallel market fell below that of the official market. Consequently, the gap between the two rates narrowed significantly to negative N4 per dollar, compared to the N27.5 per dollar difference recorded last Friday.
This trend was also highlighted in a forex market review by analysts at CardinalStone Research, who stated: “The FMDQ FX rate depreciated by 0.17 percent to N1,503.63 per dollar, while the parallel market rate strengthened by 0.67 percent to settle at N1,500 per dollar.”
Since the beginning of the year, the Naira has appreciated by 9.4 percent in the parallel market and 2.2 percent in the official market, improving from N1,655 per dollar and N1,538.5 per dollar, respectively, as recorded at the close of last year.
Traders attribute this consistent appreciation to increased dollar supply despite strong demand.
Speaking on the development, currency trader Yinusa Sadiq noted: “The Naira has been gaining strength since last week due to an increase in dollar supply, even as demand remains high.
“Access to dollars has become easier through banks and Bureau de Change operators. Both buying and selling activities are ongoing, and today the dollar traded between N1,510 and N1,500. I personally bought a dollar at N1,490.”
Another trader, Rasaq Bello, projected that the Naira could strengthen further, predicting a stable exchange rate between N1,490 and N1,500 per dollar if the dollar supply remains steady.
“If the inflow of dollars continues to rise, I expect the exchange rate to stabilize within the range of N1,490 to N1,500 per dollar this week,” he said.
Similarly, financial analysts at Cowry Asset Management Limited foresee the Naira maintaining a stable trajectory in the foreign exchange market.
“This week, the Naira is expected to trade within a relatively stable range, provided no major market disruptions occur. Exchange rate movements will continue to be influenced by market dynamics affecting the supply and demand for dollars across various segments,” they stated.