Foreign Currency Flow Stabilizes Naira, Trades ₦1,360.55/$ in NFEM, Parallel Rate Hovers Below ₦1,400/$

By George OPARA

Consistent availability of foreign currency has enhanced the naira largely stable against the United States dollar on Wednesday, with the local currency trading at ₦1,360.55/$ in the Nigerian Foreign Exchange Market (NFEM), while the parallel market rate hovered above ₦1,400/$.

Trading data indicated the dollar selling for between ₦1,400 and ₦1,405 in the parallel market, with buying rates ranging from ₦1,390 to ₦1,395.

The gap between the official and unofficial markets remained relatively narrow at about ₦30 to ₦45 per dollar, extending the convergence trend that has characterised Nigeria’s foreign exchange market in recent months.

But the latest figures from the Central Bank of Nigeria (CBN) indicated that the official NFEM rate closed at approximately ₦1,360.55/$ on Tuesday, June 9, compared with ₦1,359.50/$ at the previous close, reflecting only marginal movement in the market.

Current trading patterns pointed out that the naira is maintaining a relatively firm position in the official market, with the dollar largely trading within the ₦1,360 to ₦1,375 range over the past week.

However, the trend has strengthened expectations that the local currency may continue to benefit from improved liquidity and a more balanced supply-demand outlook.

Meanwhile, an overview of Tuesday’s trading showed the official NFEM rate at ₦1,360.55/$, while the parallel market recorded buying rates of ₦1,390–₦1,395/$ and selling rates of ₦1,400–₦1,405/$.

Currency traders attributed the naira’s stability to improved liquidity conditions in the official market, supported by ongoing reforms aimed at enhancing transparency, boosting foreign exchange supply, and strengthening investor confidence.

Knowing that rates in the parallel market moved to vary across locations and transaction sizes, smacks differences in demand and availability of foreign currency; they observed that the current spread between the official and parallel markets remains significantly lower than the wide disparities recorded in previous years.