Naira Depreciates Against US Dollar in Official Market; BDC Traders Adjust Exchange Rates

In a recent development, the Nigerian currency, the naira, has once again depreciated against the US dollar in the official market. The latest data indicates that the naira fell by N1.24 to the US dollar, while Bureau de Change (BDC) traders have also revised their exchange rates.

According to new figures from FMDQ Securities, the naira closed at N1,485.99/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Friday, May 31. This marks a 0.08% or N1.24 decline from Thursday’s closing price of N1,484.75/$1. The drop follows a 9.3% decrease in the value of foreign exchange transactions at the official market, which fell to $213.52 million from $235.41 million the previous day.

Nigerians are hoping for better performance of the naira in June across all foreign exchange markets.

Naira’s Performance Against Other Currencies

The naira also experienced significant depreciation against other major currencies. Against the British pound sterling, the naira fell by N353, trading at N1,877.92/£1 compared to N1,524.52/£1 the previous day. Similarly, the naira weakened by N301.53 against the euro, selling for N1,598.96/€1 versus N1,297.43/€1 quoted in the preceding session.

Naira to Dollar in the Parallel Market

In the parallel market, BDC traders followed the trend of the official market, adjusting their rates accordingly. Abdulahi, a BDC trader, revealed to that the dollar was sold at N1,490/$1 on Sunday, June 2, 2024, up from N1,480/$1 on Friday. He attributed the rate adjustment to increased demand for dollars, stating, “During the week, the naira recorded some improvement, but all this changed on Friday and Saturday as more Nigerians in need of dollars quickly came to us. This was the reason the rates were adjusted. It is a demand and supply market.”

CBN’s New Directives on Street Trading

the Central Bank of Nigeria (CBN) has issued new directives banning street trading of foreign currencies by BDC operators. The CBN’s Director of Risk Management, Blaise Ijebor, emphasized the need for proper regulation of the foreign exchange market. He stated that street trading of foreign currencies is not allowed and that BDC traders should operate from offices where customers can exchange their currencies in a regulated environment.

Nigerians continue to watch the foreign exchange markets closely, hoping for stability and improvement in the naira’s value in the coming months.

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