Yesterday, the Naira rose to N1,695 per dollar on the parallel market, up from N1,725 per dollar on Tuesday. However, the Naira remained constant at N1,672.69 per dollar on the Nigerian Autonomous Foreign Exchange Market, or NAFEM.
FMDQ data showed that the naira’s indicative exchange rate has been stable since Monday, when live foreign exchange transaction began on the Bloomberg BMatch System. The volume of dollars transacted (turnover) increased by 4.4% to $216.99 million from $207.86 million on Tuesday.
As a result, the difference between the parallel market and NAFEM rates fell to N22.31 per dollar from N52.31 per dollar on Tuesday. Mr. Sanni Daudu, a black market trader, explained that the naira’s continuing rise was owing to decreasing demand pressure.
Demand for the dollar has decreased as the holiday season approaches. Most importers have made purchases since they do not know what the foreign exchange rate would be next year.
This is a favourable indication for the time being, as the exchange rate today was between N1,650 and N1,700. I believe the naira will end the year at an appreciating level reflecting this trend in demand and supply.
