The Exchange rates between the naira and the dollar in the official and black markets have finally converged The naira has been trading at an average rate of N1,600 per dollar in the official and parallel markets in all the markets The disparity between the two markets has narrowed to just about two per cent as Nigeria seeks to end the naira’s volatility
.The Nigerian currency, the naira, has fallen to an all-time low of N1,600 per dollar in both the official and parallel markets following the devaluation of the naira. The Nigerian government recently devalued the local currency in the official market for the second time to bring it closer to the parallel market, thereby closing the yawning gap between the two FX rates.
The development followed a clampdown on the cryptocurrency platform Binance, which has been blamed for the continued crash of the naira in all markets.
According to reports, FX rates in official and unofficial parallel markets have averaged about N1,600 per dollar, fluctuating most of the time between N1,590 and N1,630 per dollar. According to market watchers, the development has led to a 2% disparity below the 5% considered acceptable between the two FX rates. The margin has remained consistent for about nine days, with a below one per cent disparity.
Traders have reportedly begun aligning with the official FX rates since Binance turned off its naira feature on the platform. Predictions for naira as rates fall Another Economist Intelligence Unit (EIU) report indicates that the Nigerian currency will fall as low as N2,000 per dollar in 2024.
Data from NAFEM shows that on Friday, March 8, 2024, the naira depreciated to about N1,637 per dollar in the official market, while traders quoted the intraday high at N1,640 per dollar and a low of N1,413 per dollar. The Nigerian government collapsed the various FX windows on June 14, 2023, in a Forex reform that has seen the naira lose over 50% of its value. The Central Bank of Nigeria stopped its interventions in the FX markets to allow the naira to float and ‘find its true value.’ The apex bank recently reintroduced the weekly sales of Forex to Bureau de Change (BDC) operators to enhance the naira’s performance against the dollar. US Bank predicts exciting new naira to dollar exchange rate Legit.ng reported that Goldman Sachs expected that the Nigerian currency, the Naira, would appreciate against the US dollar and exchange at N1 200/$ in 12 months.
This was stated in a Goldman Sachs report titled Nigeria- Turning the Corner. The investment bank explained that its positive outlook for the Naira is hinged on favourable accurate rates, capital inflows, and evidence of a shift to a more orthodox policy set-up. The move is seen as a market-friendly reform introduced by President Bola Tinubu, who floated the naira immediately after he became president in May 2023.
