However, the Naira appreciated to N1,528 per dollar in the Nigerian Foreign Exchange Market (NFEM) during trading activities yesterday.

Data from the Central Bank of Nigeria (CBN) indicated that the indicative exchange rate for the Naira strengthened to N1,528 per dollar, appreciating by N14 from N1,542.

Consequently, the margin between the parallel market and NFEM rate expanded significantly, increasing to N42 per dollar from N3 per dollar recorded previously.

This growing exchange rate gap reflects persistent volatility in Nigeria’s foreign exchange market, despite ongoing monetary policies aimed at stabilizing the Naira.

Analysts suggest that factors such as dollar supply shortages, forex demand pressures, and speculative trading continue driving fluctuations.

Market observers anticipate further interventions from the CBN and financial authorities to address instability and enhance confidence in the currency.

The post Naira Depreciates to N1,570/$ in Black Market, Appreciates to N1,528/$ in NFEM appeared first on Housing TV Africa.

This improvement follows increased dollar liquidity, supported by foreign exchange policies designed to stabilize the naira’s value.

At the Nigerian Foreign Exchange Market (NFEM), the naira also strengthened, trading at N1,497.11 per dollar on Monday.

This marks an appreciation compared to the previous close of N1,500.73, according to FMDQ Securities Exchange Limited data.

The exchange rate gap has now narrowed to N12 per dollar, reflecting improved confidence in Nigeria’s forex market.

The Central Bank of Nigeria’s (CBN) policies have driven exchange rate convergence between official and parallel markets.

For the first time in two years, both markets achieved convergence, signaling stability and efficiency in forex trading.

CBN Governor Olayemi Cardoso highlighted the bank’s commitment to transparency and sustained liquidity in the forex market.

He emphasized that positive FX market developments align with CBN’s long-term strategy for economic growth and stability.

The post Naira Strengthens to N1,485/$ on Black Market Amid Improved Dollar Liquidity appeared first on Housing TV Africa.

The Nigerian naira posted strong gains against the European currency at the parallel market on the weekly spectrum amid ongoing reforms in Nigeria’s foreign exchange market and political uncertainty in Europe.

The Euro is losing significant support (N1690/€) against the Nigerian currency, which has caused the EUR/NGN price to lean more bearish.

The EUR/NGN opened trading at the unofficial market at N1695 from N1852/€ against the European Currency on December 2nd, 2024.

The Electronic Foreign Exchange Matching System, which was introduced last week, addressed persistent problems with market opacity and inefficiency by promoting seamless trading and uniformity among participants.

Omolara Duke, CBN’s director of the Financial Markets, calls the Bloomberg BMatch platform a revolutionary tool for the foreign exchange market.

Commercial banks and other authorized dealers now use the Electronic Foreign Exchange Matching System (EFEMS) to place buy and sell orders in real time.

Trades are now executed quickly and give market participants and regulators real-time visibility.

Political uncertainty in France batter Euro’s prospect  

The European currency has been burdened lately by the recent political situation in France.

The Euro is currently teetering towards the crucial $1.05 mark. Europe’s single currency fell slightly more than 3% against the US dollar last month.

• The political unrest has escalated to unprecedented levels in recent days with a no-confidence vote against French Prime Minister Michel Barnier scheduled for last Wednesday night,
• Barnier’s approach to the 2025 budget led to his dismissal. He suggested raising taxes by €20 billion and cutting public spending by €40 billion, to reduce the high deficit. The other parties blocked that because it was unpopular.
• Barnier tried to move forward by pushing the bill through without a vote, which was a risky move because it led to a vote of no confidence. Barnier’s gamble did not pay off, despite his hopes that Le Pen and the RN would support him instead of being perceived as creating instability.
• The Euro continually faces pressure as President-elect Donald Trump’s threat of tariffs may harm exports, particularly in the auto sector.

The ECB intends to lower interest rates further, but many economies require fiscal support.

The issue is that while some nations, like Germany, have weak governments that can’t implement aggressive fiscal spending plans, others, like France, can’t do so because of budgetary restrictions.

Euro’s outlook  

Nevertheless, there are indications that the rally is wearing on, as the greenback couldn’t make significant progress in response to Trump’s recent tariff threats.

• Recovery signs are starting to appear on the EUR/USD price pattern. The Relative Strength Index (RSI), which indicates improving momentum but is still a warning of caution, has increased further in negative territory.
• Rising green bars on the Moving Average Convergence Divergence (MACD) indicator signify increasing bullish momentum. Although these trends are positive for bulls, long-term recovery hasn’t been completely verified.
• Historical patterns have shown that December has been the best month for the euro against the haven currency, with the currency rising an average of 1.6 per cent versus the US dollar over the previous 24 years.
• The euro usually ends December in positive territory more often than any other month, with a 71 per cent chance.

The ECB meeting in December will determine the short-term course, as will whether they announce 50 basis points or 25 bps cut. A minor plus for the euro is that it appears to be the latter. Lower interest rates are expected to boost the faltering EU economy in the upcoming year.

Source- nairametrics.

The post Naira hits back on Euro at black market, sells for N1,690/€ appeared first on Housing TV Africa.

Market fundamentals indicate that the naira has lost its support at N1450, paving the way for a new wave of decline, continuing its downward trend from March when it was hailed as the world’s best-performing local currency. Recent price action suggests the naira is nearing N1500 against the dollar.

On the black market, the naira dropped to a month-low of 1,470 against the dollar on Friday, driven by high demand for the greenback. Market analysts have consistently maintained that without corresponding fiscal policy adjustments, the local currency would struggle to maintain its year-to-date gains.

READ ALSO: Naira Value Dips 12% In 4 Days As Turnover Rises

Nigeria’s oil output, a key source of FX earnings, has been declining, highlighting the need to diversify the economy and reduce FX liabilities.

Recent data from the CBN shows that a substantial portion of $1.12 billion out of the $1.61 billion in total outflows during this period went toward paying off external debt, rather than supporting the naira, indicating the increasing pressure that foreign debt is exerting on the country’s budget and the local currency market.

READ ALSO: Naira Tops Performance Charts in April, New Report Reveals

As a result, the FX market in Nigeria will seek additional support, with the CBN expected to maintain its hawkish stance and raise the headline interest rate at its upcoming monetary policy meeting on May 21.

Despite the CBN’s efforts to clear actual FX backlogs and increase rates to attract Foreign Portfolio Investors (FPIs), profit-taking and a slowdown in inflows have overshadowed these successes.

Razia Khan, Standard Chartered’s top economist for Africa and the Middle East, noted that about $1.3 billion of naira futures are set to mature at the end of this month, potentially increasing demand for dollars as offshore investors look to capitalize on the currency’s appreciation.

READ ALSO: Naira Appreciation : We’ll Unleash More Economic Measures- Tinubu

The dynamics of the naira have become more complex as the dollar index edged higher despite signs of slowing U.S. economic growth.

The dollar index, which measures the strength of the US dollar against a basket of six rival currencies, rose by 0.07% to 105.29 index points.

The post Naira Falls to Month-Low of 1,470 Against Dollar on Black Market appeared first on Housing TV Africa.