• Saturday, December 02, 2023
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Naira gains 1.75% as speculators watch government’s FX plans

FX market opens at N1,135 per dollar on black market

Naira on Thursday gained 1.75 percent on the parallel market, also known as the black market, following some sentiments around the government’s plans to increase dollar liquidity, which has put speculators in and wait position.

During the intraday trading on Thursday, the dollar was quoted at N1,120 compared to N1,140 quoted on the previous day, on the black market.

“This is how we saw it. The dollar is coming down. Everybody is waiting to see what the government is trying to do so that we will not lose money,” a street trader at CMS said.

Nigeria’s government plans to increase dollar supply and digitalise FX transactions and discourage speculative demands and hoarding of FX in cash.

At the Nigerian Autonomous Foreign Exchange Market (NAFEM), Naira depreciated further at the official market, losing 0.55 percent despite a 60.06 percent increase in dollar liquidity on Wednesday.

Read also: Domiciliary account balance rises to $29bn amid weaker naira

After trading on Wednesday at the Nigerian Autonomous Foreign Exchange Market, the dollar was quoted at N874.71, which was weaker than N869.91 quoted on the previous day, according to the data obtained from the FMDQ.

There was increased dollar supply from the willing buyers and willing sellers and the spot rate was N1,097.50/$1 high and N745.00/$1 low.

The volume of dollar transactions, which reflects the daily foreign exchange (FX) market turnover increased by 60.06 percent to $113.52 million on Wednesday from $70.92 million recorded on Tuesday.

On Wednesday, the naira fell to N1,140 per dollar on renewed demand pressure on the black market segment of the foreign exchange market.

This represents 5.55 percent and 8.91 percent depreciation against the dollar when compared with N1,080/$1 and an average of N1,046.66 exchanged on Tuesday.

Naira on Tuesday fell to an average rate of N1,046.66 per dollar following a shortage of dollars on the black market.