The naira continued its rebound against the United States Dollar on Friday, strengthening to N950/$ on the average in the black market.
This represents a N175 gain for the local currency compared to the N1,125/$ it traded for on Thursday.
This is the second day of recovery for the naira following the Central Bank of Nigeria’s commencement of the clearance of some of its FX backlog on Thursday, marking a pivotal effort to alleviate the mounting pressure in the foreign exchange market.
The impressive ascent by the naira yesterday in the parallel market amounted to a staggering 18.42 per cent increase in value within a single day, leaving speculators grappling with unexpected losses as the black market becomes inundated with US dollars.
The ongoing efforts to bridge the gap between the official and black markets have yielded significant results. The arbitrage between these markets has notably contracted from N389 per US dollar to N174.
Multiple parallel market operators have attested to the surge in dollar supply, leading to losses for those previously acquired dollars at higher rates.
A US multinational financial services firm, JP Morgan, had on Wednesday projected that the naira would trade at N850/$ at the Investors’ and Exporters’ Forex window before the end of 2023.
However, the US bank said the recent efforts to restore a flexible FX regime may be sustained given the willingness to accompany it with tighter monetary conditions.
