As Currency Climbs To N1,262.85/$1 On Official Market

The naira strengthened further against the dollar on the official marketed Investors and Exporters’ (I&E) window- on Wednesday, closing at N1,262.85/$1 compared to N1,278.58/$1, on Tuesday, data published by FMDQ Group shows. The local currency was unchanged at N1,250 per dollar at the parallel market on Wednesday, same rate it closed at on Tuesday.

Analysts attribute the naira’s recovery on the official market to the Central Bank of Nigeria’s (CBN) decision to step up monetary policy tightening by increasing the benchmark interest rate by 200 basis points to 24.75 per cent last Tuesday. Bloomberg reported last Friday that foreign investors believe that increased tightening by the apex bank will lead to further naira appreciation on the parallel market.

According to forex dealers, the regulator’s announcement last Monday that it would sell $10,000 to each Bureau De Change (BDC) at the rate of N1,251/$1 is bolstering the naira on the parallel market. Financial experts note that the narrowing gap between the official and parallel markets, which had been as wide as 30% a few months ago, shows that the Federal Government appears to be on the path to accomplishing its goal of unifying the naira’s exchange rate.

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