Improved FX Inflow Strengthens Naira Value to N735/$1 at Parallel Market

On Tuesday, January 3, 2023, the Naira strengthened in the parallel market due to increased foreign currencies’ inflows into the foreign exchange (forex) market segment.

According to Entrepreneurng’s checks on the domestic currency exchange rate at the unofficial FX market today, the Naira gained N4 against the US dollar to trade at N735/$1, up from N739/$1 on Saturday.

The Nigerian currency appreciated against its American counterpart because it was not under pressure in the black market on Monday, a federal government-proclaimed public holiday to celebrate New Year.

Furthermore, the market saw an influx of foreign currencies on the streets today as currency hawkers purchased more Dollars than they sold, easing pressure on the Naira.

Mr Ishayaku Idris, one of the traders at the Olugbede Model Market, told this reporter that most of their customers came to exchange their dollars for naira.

However, he noted that things would change this weekend or next week as Nigerians who had returned home began to prepare to return to their bases abroad.

“The Naira is better now, but we cannot because more people are coming to change their Dollars, Pounds and Euro to Naira. Things will undoubtedly change starting next week,” Mr Idris predicted.

Today, the Naira was trading at around N736/$1 near the Lagos airport, while at Allen in Ikeja, the local currency was trading at around N735/$1.

Meanwhile, in the FX market’s Peer-to-Peer (P2P) window, the Nigerian naira gained N10 against the US dollar, trading at N743/$1 compared to N753/$1 last Friday.

In this market segment, the significant improvement in the value of the Naira to the Dollar may have been aided by lower demand for foreign currency at the exchange rate window.

Furthermore, the crypto market has been volatile in recent weeks, dampening investor appetite for tokens as they seek out safer investment opportunities.

Due to the holiday, the official FX window, the Investors and Exporters (I&E) segment, saw no trades on Monday but would resume operations on Tuesday.