Despite a sharp decline in dollar sales, the naira strengthened against the US dollar on Monday at the official foreign currency (FX) market.
The dollar was quoted at N1,476.12 after trading ended, up from N1,485.99 on Friday at the Nigerian Autonomous Foreign Exchange Market (NAFEM), according to statistics from the FMDQ Securities Exchange Limited. The naira had gained 0.67 percent during the day.
The amount of money provided by eager buyers and sellers fell by 63.78 percent, from $336.54 million on Friday to $121.87 million on Monday. One of the main factors affecting the behavior of the market was this significant decline in the dollar supply.
The intraday high closed at N1,500 on Monday, according to the FX market summary, which was higher than the N1,550 posted at NAFEM on Friday.
Furthermore, the intraday low for the dollar dropped to N1,250 from the N1,174.88 posted on Friday. These swings show that the value of the naira about the dollar changed significantly and quickly during the trading day.
The dollar was quoted between N1,475 and N1,510 on the black market, also known as the parallel market, due to high demand. Compared to Friday, when the dollar finished at N1,480, there has been a minor shift.
Due to variables including market speculation and reduced liquidity, the parallel market frequently exhibits distinct dynamics from the official market, including increased volatility and wider spreads between buy and sell rates.
Despite a decrease in the availability of dollars, the naira has appreciated on the official market, indicating a high level of underlying demand for the Nigerian currency.
Ongoing economic stresses and possible threats to currency stability in the larger Nigerian economy are indicated by the parallel market’s persistently high demand for dollars.
