Naira Appreciates in the Black Market
The naira posted a marginal gain against the United States dollar at the parallel market on Monday, closing at 364/dollar.
The local currency closed at 365/dollar on Sunday. The development brought the rate closer to the official price of 360/dollar for invisible transactioms.
Following the continued supply of the dollar to the foreign exchange market, the CBN local currency has recorded major appreciation from its all-time-low of 520/dollar.
Deposit Money Banks currently sell dollars to end-users in the invisible transactions segment at 360/dollar. Invisible transactions include tuition fees, medical bills and personal travel allowance, among others.
The local currency had closed at 371/dollar the previous Friday, having appreciated to 374/dollar the previous Thursday from 382/dollar recorded on Wednesday.
Two weeks ago, the local unit had closed at 382/dollar. Currency analysts have said they expect the naira to be stable across the board in the near term on increased dollar supply to both the official interbank window and the black market.
At the interbank market, the naira was trading at around 305.40 per dollar. According to Reuters, the Central Bank of Nigeria has been intervening on the official market to try to narrow the spread between the official interbank and black markets.
The CBN has sold over $4bn since February, improving dollar supply and providing support for the naira. The recent gains recorded by the local unit have brought the CBN closer to its plan to achieve rate convergence.
