The naira experienced a notable depreciation at the parallel market on Wednesday, falling to N1,500 against the dollar, a 3.45 percent decrease from the rate of N1,450 per dollar observed on Monday.
This recent slide underscores the volatility in the foreign exchange market, contrasting with a slight appreciation observed at the official window.
Bureau De Change operators (BDCs) in Lagos, pivotal players in the parallel market, have set the buying rate of the US dollar at N1,490 and the selling rate at N1,500, marking a N10 profit margin per dollar.
Meanwhile, at the official trading window, the naira saw an appreciation, closing at N1,418 to a dollar on Wednesday, up from N1,433 on Tuesday, reflecting a 1.05 percent increase in value.
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The foreign exchange market dynamics, as tracked by the FMDQ Exchange, indicate fluctuations with the naira trading between a high of N1,510 and a low of N896.28, alongside a daily turnover of $203.93 million.
In a significant move on February 1, 2024, the Central Bank of Nigeria (CBN) continued its efforts to reform the foreign exchange market by lifting the cap on the FX rate quoted by international money transfer operators (IMTOs).
This decision is part of a broader strategy to improve liquidity and ensure a more transparent pricing mechanism in the FX market.
CBN said, “For the avoidance of doubt, by this circular, the cap on allowable limit of -2.5% to +2.5% around the previous day’s closing rate of the Nigerian Foreign Exchange Market is hereby removed.”
CBN instructed the money transfer operators to quote exchange rates based on the prevailing market rates at the FX market
