Naira appreciates to N1,370/$ in parallel market as official rate hits N1,329.5
By Aboki Forex —
The naira strengthened to N1,370 per dollar in the parallel market, up from N1,375 on Tuesday. At the Nigerian Foreign Exchange Market (NFEM), the currency also gained, closing at N1,329.5 per dollar.
Data from the Central Bank of Nigeria (CBN) showed the indicative exchange rate fell to N1,329.5 per dollar from N1,331 per dollar on Tuesday, a N1.5 appreciation for the naira.
Gap between markets narrows to N40.5
The margin between the parallel market and the official market narrowed to N40.5 per dollar, down from N44 per dollar on Tuesday. That is a N3.5 reduction in the spread between the two rates.
A narrower gap reduces the incentive for round-tripping, where traders buy cheap dollars at the official window and resell them in the parallel market at a premium.
Interbank turnover jumps 122.6%
Interbank turnover in the NFEM rose sharply by 122.6 percent to $179.6 million, up from $80.6 million on Tuesday. The jump in volume points to stronger trading activity at the official window on the day.
The combination of a firmer naira and higher turnover suggests improved supply at the official market. Whether that holds will depend on how much foreign exchange continues to flow through the NFEM in the coming sessions.