February 27, 2025
Official rate now exceeds the transaction quote in the black market, thereby making speculators in the Nigerian foreign exchange market to presently earn a negative spread on their respective positions.
According to report monitored on Marketforce Africa, the switch in exchange rates positions between the two markets could last longer or short live depending on the Central Bank of Nigeria’s stance on FX direction and perhaps availability of additional inflows.
Meanwhile, in the absence of demand pressures, the naira gained ₦2.34 to close at $/₦1,499.08 in the official market. The Nigerian Foreign Exchange Market, NFEM, remained stable, with trading rates fluctuating between $/₦1,495.00 to $/₦1,515.00.
Also, the exchange rate closed at $/₦1,490.00 in the parallel market as Bureau de Change, BDCs, operators saw sufficient US dollar stocks.
READ MORE; Euro Hits A Month High Against The Dollar As Naira Opens at N1560/€
FX speculators with open positions may be losing at least N9 on each US dollar holdings. The naira exchange rate dynamics changed strongly on the back of sustained FX intervention; foreign investors improved confidence and zero backlog.
But a slew of analysts see the Central Bank of Nigeria’s, CBN, aggressive FX intervention as a short-term approach to soving long-term issues, a trend which they said was not sustainable,
Making reference to April 1 2024 when the naira was ranked as best performing local currency in the world and the subsequent depreciation, the CBN FX intervention is already depleting the nation’s gross external reserves.
