The Naira yesterday depreciated to N1,645 per dollar from N1,640 per dollar on Tuesday.
However, the Naira appreciated to N1,539.65 per dollar in the Nigerian Autonomous Foreign Exchange Market, NAFEM.
Nigeria’s naira has appreciated significantly, with the indicative exchange rate for NAFEM falling to N1,539.65 per dollar from N1,656.49 per dollar, a N116.84 appreciation [You]. This development is a welcome change for the Nigerian economy.
The volume of dollars traded in the official market also surged by 38.9% to $139.48 million, up from $100.39 million on Tuesday . However, the margin between the parallel market and NAFEM rate widened to N105.35 per dollar from N16.49 per dollar on Tuesday .
For context, NAFEM is a market segment for FX trades based on market-determined exchange rates, established by the Central Bank of Nigeria . The Central Bank has adopted various exchange rate systems over the years to achieve market stability, including controlled, floating, and managed float systems .
The widening gap between the official and parallel market rates can be attributed to factors such as demand pressure, lower FX inflows, and CBN intervention . This disparity creates an avenue for manipulations in the currency market .
