Naira appreciates as traders offload Dollars

Naira appreciated to N1,515 per Dollar in the parallel market, also known as the black market, on Friday.

This gain came as traders offloaded dollars in response to the Central Bank of Nigeria’s (CBN) new foreign exchange (FX) framework.

The currency, which had depreciated to a record low of N1,755 per dollar on November 21, 2024, prior to the implementation of the new FX policy, has since recovered by 18.8 percent, or N240, to its current rate of N1,515 in the black market.

At the official market, the naira also recorded gains, appreciating by 2.08 percent, or N32, as the dollar was quoted at N1,535 on Friday compared to Thursday’s closing rate of N1,567 at the Nigerian Foreign Exchange Market (NFEM), according to CBN data.

The improvement follows the CBN’s directive issued on Tuesday, November 26, 2024, which required all banks operating in the interbank FX market to adopt the Bloomberg BMatch system for trading. The platform, which became operational on December 2, 2024, aims to enhance transparency and operational efficiency in Nigeria’s FX market.

The CBN explained that the Bloomberg BMatch platform introduces an automated trade-matching system to improve market integrity and facilitate better price discovery. Omolara Duke, director of the CBN’s financial markets department, noted in a circular to banks that the initiative represents a significant advancement in ensuring uniformity and seamless operations among market participants.

Since the platform went live on Monday, the naira has gained 8.97 percent, or N137.69, improving from N1,672.69 on November 29, 2024, the last trading day for the month, to N1,535 as recorded on the Bloomberg BMatch system.

In a bid to further streamline operations, the CBN last week issued detailed guidelines for the interbank FX trading system under the Electronic Foreign Exchange Matching System (EFEMS). The guidelines set a minimum tradable amount of $100,000, with incremental clip sizes of $50,000, to foster greater transparency and efficiency in the FX market.