Naira Appreciates Again As Dollar Value Drops Further in Official Market

• The value of the United States dollar has depreciated again in the official foreign exchange market
• The new exchange rate data released by the CBN shows that the dollar lost N6 at the NAFEM window
• There have been growing market concerns about the US Federal Reserve's independence, which has affected the dollar

Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The Nigerian currency, the naira, has appreciated against the United States dollar in the official market.

Data from the Central Bank of Nigeria showed that the Nigerian Foreign Exchange Market (NFEM) on Thursday, Jun 26, recorded a closing rate of N1,543 per dollar.

Thursday's exchange rate is a N6 appreciation for the naira when compared to the previous day's closing rate of N1,549 recorded in the official market.

During trading on Thursday, participants quoted the naira to dollar at the highest rate of N1,549.5 while the lowest rate was N1,534.

The strong performance of the naira comes amid growing market concerns about the Federal Reserve's independence following comments by President Donald Trump to replace Federal Reserve boss Jerome Powell.

These concerns led to the dollar hitting a more than three-year low, Reuters reports.

Naira vs pound

The naira continued its strong performance against the Pound Sterling, appreciating to N2,083.76/£1 on Thursday from N2,109.79/£1 on Wednesday, an improvement of N26.03.

Against the Euro, the naira also firmed up, trading at N1,783.36/€1 on Thursday compared to N1,778.12/€1 on Wednesday, gaining N5.24.

Naira improves against the dollar at the black market

In the parallel market, also known as the black market, the naira recorded a different story as it depreciated slightly.

Traders who spoke to Legit.ng confirmed the latest rates:

"We sold the dollar at N1,573/$1 on Thursday compared with the N1,570/$1 it was exchanged on Wednesday."

Snapshot of naira rates in the official market

Based on CBN published rates, here is a breakdown of the naira's performance against other foreign currencies in the NAFEM market.

• CFA: N2.74
• Yuan/Renminbi: N214.20
• Danish Krona: N240.93
• Euro: N1,797.52
• Yen: N10.64
• Riyal: N409.56
• South African Rand: N86.71
• Swiss Franc: N1,917.71
• Pounds Sterling: N2,106.89

ABCON lists reasons for naira's appreciation

Earlier in a chat with Legit.ng, Aminu Gwadabe, the President of the Association of Bureau de Change Operators of Nigeria (ABCON), has called on the CBN to enforce maximum margins on sales by banks to Bureau De Change to prevent market distortions.

His words:

"Without a continuing regulatory oversight on transparency of participants as regards the maximum margin on sales by the banks to the BDCs,

"Also it is for the CBN to issue a prudential percentage on volumes of sales on Diaspora’s remittance, portfolio investment proceeds by banks to BDCs to continue to usher in supply and thereby discouraging the illegal economic behaviour of currency substitution, speculation and discretionary demands that are frivolous in nature."

Source: Legit.ng