NEWS
Naira Strengthens to #1590/$1 in Parallel Market, Weakens in Official Window

On Monday, the Nigerian Naira appreciated in the parallel market, trading at N1,590 per US dollar, an improvement from N1,610 the previous week.
In contrast, the official Nigerian Autonomous Foreign Exchange Market (NAFEM) saw the Naira weaken to N1,495.60 per US dollar, down from N1,474.78 on Friday. This decline followed an eight-month high of N1,474.78 per US dollar last week, achieved after government fiscal and monetary policies aimed at stabilizing the exchange rate.
Analysts attribute the Naira’s recent strength to factors such as increased local petrol refining capacity, higher foreign exchange inflows, and the Central Bank of Nigeria’s (CBN) policy interventions over the past 17 months. In January, the Naira traded between N1,506 and N1,560 per US dollar, strengthening to N1,493 on January 30 and further to N1,475 on January 31. Year-on-year, NAFEM closed at N1,455.59 per US dollar at the end of January 2024, representing an approximate difference of 1.33 percent.
Despite the recent appreciation, analysts caution that fluctuations remain likely due to external factors such as global oil prices, remittance inflows, and investor sentiment toward Nigeria’s economy. Further interventions from the CBN may be necessary to ensure sustained stability.
The CBN has implemented various policy measures to support the Naira, including tightening regulations on Bureau De Change (BDC) operators and increasing dollar liquidity in the official market. Earlier this week, CBN Governor Olayemi Cardoso reiterated that violations of the newly launched Nigeria Foreign Exchange (FX) Code would attract strict penalties. He emphasized the CBN’s commitment to enforcing transparency and ethical conduct in the FX market.
“The FX Code marks a new era of compliance and accountability. It is not just a set of recommendations but an enforceable framework. Under the CBN Act 2007 and BOFIA Act 2020, violations will be met with penalties and administrative actions,” Cardoso stated.
Additionally, the CBN recently announced the waiver of the 2025 non-refundable annual license renewal fee for BDC operators. In a circular signed by John S. Onojah, Acting Director of the Financial Policy and Regulation Department, the CBN said the move aims to ease financial obligations for BDC operators and promote stability in the FX market.
This waiver aligns with the CBN’s broader strategy to support the transition to a new regulatory structure for BDC operations, following the release of the Regulatory and Supervisory Guidelines for Bureau De Change Operations in Nigeria, 2024.
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