Naira Appreciates 9% Against Dollar, Reaches N1,190 in Parallel Marketas at end of October 2023

In a remarkable turn of events, the Nigerian naira has shown significant strength against the US dollar, appreciating by 9%. As a result, it now trades at an impressive N1,230 per dollar in the parallel foreign exchange market. This noteworthy surge represents an appreciation of N85 or 6.5% compared to the N1,315/$ rate observed just a day earlier.

Bureau De Change operators (BDCs) in Lagos have reported their eagerness to purchase a dollar at N1,200 and then sell it at the rate of N1,230/$. This substantial gap allows for a profit margin of N30, indicating the positive sentiment surrounding the naira.

Hamuc, a forex trader operating in the parallel market, shared insights into this significant development. He mentioned that they received a circular that played a pivotal role in influencing the price.

While the parallel market enjoys this boost, the official foreign exchange market witnessed a moderate depreciation in the local currency’s value. The naira saw a decrease of N36.39 or 4.54%, moving from N801.10/$ on Wednesday to close at N837.49/$ on Thursday.

For a comprehensive view of the foreign exchange landscape, we turn to the FMDQ Exchange, a platform that oversees official foreign exchange trading in Nigeria. According to data from this platform, the exchange rate experienced a high of N891 and a low of N701, indicating a certain degree of volatility.

These significant developments come on the heels of an announcement by Wale Edun, the Minister of Finance and Coordinating Minister of the Economy. Edun revealed that Nigeria is anticipating an influx of $10 billion in foreign currency in the coming weeks. This move is aimed at easing liquidity concerns in the foreign exchange market and boosting the value of the naira.

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Notably, President Bola Tinubu had previously assured the nation of ongoing initiatives to enhance foreign exchange liquidity. These efforts signal a proactive approach from the government in addressing currency-related challenges.

Furthermore, the Central Bank of Nigeria (CBN) has also pledged to provide forex as needed, reinforcing its commitment to supporting the naira and maintaining exchange rate stability.

In conclusion, the Nigerian naira’s recent appreciation against the US dollar, reaching N1,230 in the parallel market, reflects positive developments in the foreign exchange landscape. As the nation anticipates significant foreign currency inflows and the government takes proactive measures, there is optimism for continued naira strength and stability in the forex market.

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