The gap between the official and parallel market exchange rates of the naira has tightened, with the currency experiencing fluctuations in both markets.
In the official market, the naira lost N3.35 to the dollar on Tuesday, indicating a minor weakening. After a sharp increase over the previous two months, this was the second decline in value this week.
At the official exchange platform (FMDQ), the naira was quoted at ₦1,498.95 per dollar, mainly due to moderate demand for foreign exchange.
Market analysts predict that the CBN may intervene soon by selling more dollars to stabilize the currency. Recently, the central bank allowed commercial banks to sell $25,000 each to increase the supply of dollars in the parallel market (black market).
Meanwhile, the parallel market exchange rate improved, with the naira strengthening to ₦1,600 per dollar. As a result, the gap between the official exchange rate and the black market rate narrowed to 6.74%, down from 6.98%. In absolute terms, the difference between both rates dropped to N101 per dollar.
This narrower difference, according to some analysts, is encouraging since it shows that Nigeria’s various exchange rates are getting closer to being unified. Others caution that the disparity is still wide enough to fuel speculation, which might cause the currency market to become unstable once more.
