Why the naira reversed gain against the dollar in the official market

• The Nigerian currency, the naira, reversed gains on Wednesday, October 9, 2024, in the official window
• Currency dealers quoted the dollar at N1,625.13 as against the N1,561.76 it traded the day before
• However, the naira appreciated in the parallel market, trading at N1,675 per dollar from N1,685 per dollar it traded on Tuesday, October 9, 2024.

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The Nigerian naira depreciated in the official market on Wednesday, October 9, 2024.

Nigerian Autonomous Foreign Exchange Market (NAFEM) Traders quoted the US dollar at N1,625.13 per dollar as against the N1,561.76 it traded on Tuesday, October 8, 2024.

The naira closes negatively in the official window against the dollar Credit: Picture Alliance/Contributor
Source: Getty Images

Dollar inflow declines in the official window

Data from the FMDQ Exchange shows that the exchange rate in the official window depreciated to N1,625.13 per dollar from the N1,561 it traded the previous, showing an N63.37 drop in the official window.

The FX market recorded a decline in market turnover by 32.7% to $170.6 million from $235.68 million recorded the previous day.

Currency traders quoted the dollar at a high of N1,652 per dollar and a low of N1,560.

Meanwhile, the naira rose in the parallel segment of the FX market to N1,675 per dollar from N1,685 per dollar it traded on Tuesday, October 9, 2024.

The gap between the official and black market narrows

The gap between the parallel market and the official window closed by N49.87 per dollar from N132.24 recorded on Tuesday, October 8, 2024.

Abbas Yishau, a black market trader, disclosed that the dollar's demand moderated on Wednesday, leading to the naira’s rise in the parallel market.

“There were demands for the dollar but not as intense in the two days prior. What we see is that there is a sluggish demand for the dollar in the black market.“I think more people now buy FX from official sources because it is easily accessible than in the black market,” he said.

Dollar crashes in the official market

Legit.ng earlier reported that the Nigerian currency, the naira, gained against the dollar in the official window on Tuesday, October 8, 2024.

The naira rose 4.48% in the official market to close at N1,561.76 per dollar from the N1,635.15 it traded the previous day.

The naira’s value was propelled by the rise in forex turnover in the official market, which hit $253.68 million from $113.12 million.

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Source: Legit.ng