The Nigerian Naira saw a notable appreciation of 5.06% in the official foreign exchange market on Wednesday, fueled by a surge in dollar supply, which reached $221.24 million in a single trading session. The Naira closed at N1,558.75 per dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM), up from N1,637.59 the previous day, according to data from FMDQ Securities Exchange Limited.
This supply boost, driven by transactions between willing buyers and sellers, rose by 54.55% compared to Tuesday’s $143.15 million. Throughout the day, the currency experienced an intraday high of N1,659.50 per dollar and a low of N1,540, marking a stabilization in market conditions.
In the parallel market, often referred to as the black market, the Naira remained steady at N1,660 per dollar. Last week, the Naira gained 0.33% to close at N1,593.32 per dollar in the NAFEM window, moderating its year-to-date depreciation to 43.07%. However, the currency weakened by 1.80% in the parallel market, ending at N1,670 per dollar, creating a 4.8% gap between official and unofficial rates.
Meanwhile, the Central Bank of Nigeria (CBN) contributed to market liquidity by selling dollars to Bureau de Change (BDC) operators at a rate of N1,580 per dollar, primarily to meet the demand for invisible transactions like school fees, medical expenses, and travel allowances. Inflows through NAFEM reached $477 million, while outflows surged to $529.30 million, driven by corporate activities in the exporters/importers window.
Despite this, the CBN reported a marginal 0.09% gain in its foreign exchange reserves, which now stand at $36.34 billion.