Naira Continues Rapid Gain Against the Dollar as Rate Drops to N1,535
Unprecedented Market Transformation Unfolds with Enhanced Foreign Exchange Market System
The Nigerian naira has experienced a remarkable appreciation, closing at N1,535 to the dollar on Friday, December 6, 2024, in an unprecedented market transformation driven by the Central Bank of Nigeria’s Enhanced Foreign Exchange Market System (EFEMS).
The trading day revealed extraordinary market dynamics, with an intra-day high of N1,575 and a low of N1,510, ultimately settling at an average rate of N1,533. The parallel market experienced an even more dramatic shift, with dollar rates plummeting to as low as N1,570.
Market sources reported a startling trend where sellers were desperately seeking buyers. Some sellers were forced to offload currency at rates as low as N1,500 per dollar, with cryptocurrency platforms facilitating even more aggressive exchanges through peer-to-peer platforms.
The official market’s sustained rally represents one of the naira’s strongest performances in recent months. The gap between official and parallel market rates has narrowed to less than N35, approximately 2.3% as of Friday’s close, signaling a potential stabilization of the foreign exchange market.
The EFEMS platform has been crucial in driving market transparency, consolidating all forex transactions into a single, centralized system. This approach has significantly reduced speculative behaviour and bolstered confidence in the naira.
Market analysts interpret these developments as a paradigm shift, with individuals and businesses increasingly seeing value in holding naira over dollars. The Central Bank’s strategic intervention appears to be yielding significant results, delivering gains for four consecutive days and fundamentally challenging previous forex market dynamics.