The Nigerian Naira strengthened against the US Dollar today, reaching its highest level since the devaluation in January. The official exchange rate closed at ₦1,245 per US dollar, according to data from the Nigerian Autonomous Foreign Exchange Market (NAFEM).
Dollar to Naira Exchange Rates Today
- Official Rate: ₦1,245 per US Dollar.
- Black Market Rate: ₦1,117 per US Dollar, lower than the official rate.
- Comparison to Yesterday’s Rate: The Naira is barely stronger when compared to last week’s closing rate of ₦1,251.05.
This marks the fourth consecutive week of appreciation for the Naira, reflecting increased confidence in the currency. Recall that the Nigerian official currency ended the previous week at ₦1,251.05/$1, up against the US dollar at the official window for the fourth straight trading day in April 2024.
Last month, the Economist Intelligence Unit predicted that the value of the Nigerian Naira would eventually level out at roughly ₦2,000 per US dollar this year. But so far, the naira has defied it. However, the Nigerian Naira still faces significant resistance. Analysts warn of potential resistance due to a strengthening US Dollar. The Naira continues to hover near a key support level of ₦1,200 per US Dollar, indicating that there is still some underlying market uncertainty.
Equally noteworthy, a significant development also emerged in the parallel market. The CBN issued a circular to Bureau De Change operators, informing them that $10,000 will be sold to each BDC at a rate of ₦1,101/$1. This comes after the Association of Bureau De Change Operators of Nigeria requested the CBN lower the official BDC rate, claiming it was too high.
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The CBN has instructed each BDC to sell the dollars to eligible customers at a rate not exceeding 1.5% above the purchase price. This suggests that BDCs are to not sell above ₦1,117/$1. This is below the ₦1,251.05/$1 rate at the end of last week. For the first time in 15 years, the unofficial black market rate is lower than the official CBN rate for Bureau De Change operators. This suggests a potential convergence of the two markets, reflecting increased confidence in the official rate.
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