Naira Surges: N1,040 Exchange Rate Marks Impressive Gain in Parallel Market

In a significant turn of events, the naira displayed remarkable resilience and appreciated against the US dollar in the parallel segment of the foreign exchange market on Friday.

The local currency surged by N145, marking a substantial 12.24 percent gain, to reach an exchange rate of N1,040 per dollar at the street market. This surge comes in contrast to its previous trading rate of N1,185, just a few days earlier on Tuesday.

Bureau De Change (BDC) operators in Lagos reported a buying price of N1,000 for the dollar and a selling price of N1,040, providing a profit margin of N40.

One trader, identified simply as Aliyu, noted the increased transaction activity, which has contributed to this positive trend.

However, at the investors and exporters (I&E) window of the official market, the naira experienced a 0.92 percent decline, reaching N793.28 per dollar, compared to its previous rate of N786.02 on Wednesday.

Data from the FMDQ Securities Exchange, the platform overseeing FX trading in Nigeria, revealed that the naira achieved a record intra-day high of N1,018 per dollar, with a low of N730.

The surge in the naira's value in the parallel market has significantly narrowed the exchange rate gap between the parallel market and the official window, now standing at N246.72.

This development follows closely on the heels of the Central Bank of Nigeria (CBN) launching an initiative to clear the foreign exchange (FX) forwards backlog in banks. 

Finance Minister Wale Edun had earlier linked the continuous decline in the naira's value to overdue forward payments in an announcement made on September 22.