Naira Records Significant Gains at Official Window, Slips in Parallel Markets
Written by Jerry Alomatu on May 28, 2024
In a dynamic day of trading, the Nigerian currency, the naira, witnessed contrasting fortunes on Monday, with notable gains registered at the official exchange window while experiencing a slight decline in the parallel markets.
At the Nigerian Autonomous Foreign Exchange Market (NAFEM) window, the naira staged an impressive rally, appreciating by a staggering N143.48 within a single day. It closed at N1,339.33 against the US dollar, marking a substantial increase from Friday’s rate of N1,482.81. This remarkable surge represents a 9.68 percent gain and stands as the highest rate recorded in two months, mirroring the N1,339.23/$1 rate observed on April 26.
However, the narrative differed in the parallel market, where the naira experienced a marginal decline, slipping to N1,520/$1. This represents a modest N5 loss compared to the rate of N1,515/$1 recorded over the preceding weekend.
The surge in transaction volumes added another layer of complexity to the day’s trading activities. While the naira’s value soared at the official window, the daily turnover witnessed a notable decline of 67.49 percent. Transaction volumes amounted to $180.80 million on Monday, a significant drop from the $556.25 million recorded on Friday.
Furthermore, the fluctuations in exchange rates were evident throughout the day, with the highest spot rate observed at N1,501 and the lowest spot rate recorded at N1,310.
The contrasting performance of the naira underscores the volatility of Nigeria’s foreign exchange markets and the complex interplay of factors influencing currency dynamics. While the significant gains at the official window signal renewed confidence in the naira’s stability, the slight dip in the parallel markets highlights ongoing challenges and uncertainties.
As stakeholders monitor these developments closely, attention remains focused on the underlying factors driving these fluctuations and the implications for Nigeria’s economic landscape.
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Author: Jerry Alomatu
Astute communicator
