The Nigerian naira experienced mixed fortunes on Wednesday, appreciating slightly in the parallel market while depreciating in the official market.
In the parallel market, the naira strengthened to ₦1,565 per dollar, marking a modest gain from ₦1,570 per dollar on Monday. This appreciation is attributed to the Central Bank of Nigeria's (CBN) ongoing efforts to stabilize the foreign exchange market through policies aimed at increasing dollar supply and moderating demand.
However, in the Nigerian Foreign Exchange Market (NFEM), the naira weakened to ₦1,537 per dollar, representing a ₦9 depreciation.
Despite the challenges facing the Nigerian economy, the naira's appreciation in the parallel market is a positive development. The narrowing gap between the official and parallel market rates, now at ₦37 per dollar, suggests a more stable foreign exchange market.
The CBN's recent directive mandating Bureau de Change (BDC) operators to purchase foreign exchange from authorized dealers has contributed to increased dollar supply in the market. BDCs are required to sell the foreign exchange to end-users at a rate not exceeding a 1 percent margin above the buying rate.
The appreciation of the naira in the parallel market is a positive development for the Nigerian economy. It is expected to boost investor confidence and increase foreign investment in the country. A stable foreign exchange market is crucial for economic growth and development.
The Central Bank of Nigeria (CBN) has been working to stabilize the foreign exchange market, and its policies have helped to achieve this goal. The CBN must continue to implement policies that ensure the naira remains competitive and that the foreign exchange market remains stable.
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