The exchange rate gap between the official and parallel segments of the foreign exchange market has undergone a significant transformation, now standing at N150 per dollar, down from N301 per dollar in 2021 following the FX unification in June.
This change is occurring in the midst of a tightening supply of the US dollar.
On Tuesday, the naira experienced a dip in value, reaching N920-N925 per dollar in the parallel market due to robust demand for the greenback. Dealers were acquiring the dollar from willing sellers at N915/$ while selling to eager buyers at rates ranging between N920-N925/$.
During intraday trading on the same day, the dollar was quoted at N920-N925/$1, marking a 1.09 percent depreciation compared to the N915 per dollar rate observed during the morning session. In contrast, the official Investors’ and Exporters’ (I&E) window recorded a dollar rate of N775.34 on Tuesday.
The Central Bank of Nigeria (CBN) made a significant move on June 14, 2023, by merging all segments of the FX market into the I&E window.
According to Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise, the unification of rates doesn’t imply uniformity across all market segments. The objective is to ensure that rate differentials remain minimal, ideally between 5-10 percent.
In further measures, the CBN released a new operational guideline for the sale of FX by Bureau De Change (BDC) operators on August 18, 2023.