The Naira continues to gain ground in the foreign exchange market with black market rates at their strongest in a year trading at N1,590 per Dollar on Tuesday afternoon, Investors King has gathered.
The new foreign exchange framework introduced by the Central Bank of Nigeria (CBN) has seen the local currency appreciate considerably across segments in the last trading days.
This development has proven speculators wrong, as they’ve counted losses over the last week.
At the beginning of last week, the Naira was trading around the N1,700 mark, and it has now strengthened to the N1,500 mark— where it may navigate for the next couple of days.
The official market experienced rapid gains in the exchange rate trading at N1,552 per Dollar, according to the latest update on FMDQ Securities Limited website.
However, the parallel market offers the most surprising outcome for the Naira, which is gaining rapidly with more people dumping the FX to avert losses.
The CBN had on Monday, December 2, launch the Electronic Foreign Exchange Matching System (EFEMS), an electronic platform introduced to tackle speculation and improve transparency in Nigeria’s foreign exchange market.
In a circular announcing the EFEMS platform, the apex bank explained that it facilitates spot foreign exchange transactions between the naira and the US Dollar.
The platform, operated through Bloomberg’s BMatch system, requires a minimum trade value of $100,000, with incremental trade sizes of $50,000.
CBN also stated that the platform automatically matches buy and sell orders, promoting fairness and efficiency in FX trading. The EFEMS system allows authorized dealers, including commercial banks, to place buy and sell orders in real-time.
Transactions are automatically matched based on predetermined rules, ensuring swift execution and real-time visibility for market participants and regulators.
Market analysts told this newspaper that the Naira is expected to ease further, but warned that it may return to find higher levels if the CBN doesn’t sustain its recent moves.
