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The Nigerian naira has gained against the US dollar in the parallel market, trading at an average rate of N1,515 on Wednesday.
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The naira’s recovery is attributed to the Central Bank of Nigeria’s (CBN) ongoing reforms, including the Electronic Foreign Exchange Matching System (BMatch).
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The US dollar, however, remains strong due to safe-haven demand amid global economic uncertainty and US President Donald Trump’s tariff threats.
The Nigerian naira posted decent gains against the American dollar on the parallel foreign exchange market during the mid-week trading session, amid ongoing improved market sentiments in Nigeria’s capital market.
Currency traders exchanged the naira at an average rate of N1,515 on Wednesday, up from N1,520/$ on Monday, representing a gain of N5 within a single day.
The changing dynamics in Nigeria’s foreign exchange market can be partially attributed to the CBN’s ongoing reforms.
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The Electronic Foreign Exchange Matching System (BMatch), which was implemented in December 2024, is one of the major policy changes credited with the naira’s recovery.
READ ALSO: Naira Appreciates Against Dollar on Black Market
This CBN-backed platform ensures more transparency and effective price discovery in the FX market.
The US dollar, however, remains strong due to safe-haven demand amid global economic uncertainty and US President Donald Trump’s tariff threats.
Trump’s remarks late Tuesday, in which he announced plans to impose auto tariffs “in the neighborhood of 25 percent” and similar duties on imports of semiconductors and pharmaceuticals, propelled the dollar’s gains.
Naira Gains Despite 32% Drop in FX Market Turnover
Nigeria’s foreign exchange market turnover declined significantly in December 2024, falling by 32.28% to $9.74bn from $14.39bn in November.
The decline, highlighted in the FMDQ Exchange’s December Financial Markets Monthly Report, reflects the impact of ongoing foreign exchange market reforms and broader liquidity challenges.