Naira Stuns with Remarkable 12.24% Surge, Hits N1,040 per Dollar in Parallel Market

In a surprising twist of fate, the naira has demonstrated extraordinary resilience and made significant gains against the US dollar within the parallel segment of the foreign exchange market on a Friday to remember.

The local currency experienced a staggering increase of N145, marking a substantial 12.24 percent gain, propelling it to an exchange rate of N1,040 per dollar at the street market. This surge is a stark departure from its previous trading rate of N1,185, which was recorded merely a few days earlier on a Tuesday.

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

One astute trader, known by the name Aliyu, took note of the heightened transaction activity contributing to this remarkable uptick.

Conversely, at the investors and exporters (I&E) window of the official market, the naira faced a slight dip of 0.92 percent, resulting in an exchange rate of N793.28 per dollar. This minor decrease is in contrast to the previous rate of N786.02 observed just two days earlier on a Wednesday.

Data sourced from the FMDQ Securities Exchange, the platform overseeing foreign exchange (FX) trading in Nigeria, disclosed that the naira achieved an unprecedented intra-day high of N1,018 per dollar while touching a low of N730.

The significant surge in the value of the naira within the parallel market has played a pivotal role in substantially reducing the exchange rate gap between this market and the official window, currently narrowing to N246.72.

This captivating development unfolds shortly after the Central Bank of Nigeria (CBN) launched an initiative aimed at clearing the backlog of foreign exchange (FX) forwards in various banks.

Finance Minister Wale Edun had previously linked the persistent decline in the naira's value to the delay in processing forward payments, as announced on September 22.