GistReel
The naira strengthened further on Thursday, trading at ₦1,344.45 to the US dollar in the latest available foreign exchange market indication.
The latest movement points to continued improvement in the local currency’s performance as dollar supply and market liquidity increase.
The new rate represents another strong showing for the naira following gains recorded earlier in the week.
Naira maintains upward momentum
CBN data showed that the Nigerian Foreign Exchange Market (NFEM) rate reached ₦1,343.32 on August 18.
This came after the naira traded at about ₦1,350 per dollar at the end of trading on August 17.
A live currency-rate platform also placed the USD/NGN exchange rate at ₦1,344.45 as of 5:18 a.m. UTC on Thursday.
The development suggests that the naira has continued to benefit from improved conditions in the official foreign exchange market.
Parallel market remains higher
Despite the naira’s gains in the official market, the parallel market continued to quote the dollar at a significantly higher level.
Aboki Forex reported that the dollar was selling for around ₦1,404 on Thursday.
The difference between the ₦1,344.45 NFEM rate and the ₦1,404 parallel-market rate is about ₦60 per dollar.
This shows that a considerable gap still exists between official and street-market exchange rates.
Dollar liquidity supports currency
Market reports have linked the naira’s recent recovery to increased dollar supply and stronger liquidity.
AbokiFX reported on August 19 that the currency had reached a five-month high of ₦1,343.32 against the dollar.
The CBN states that the NFEM rate is determined using a volume-weighted average and represents the official exchange rate for the day.
However, individuals and businesses buying dollars may receive different rates depending on their bank, Bureau de Change operator, location and transaction size.
The naira-dollar rate could also change during the day as foreign exchange demand and supply continue to fluctuate.