Forex Traders Lament as Naira Strengthens to N805/$1 at Parallel Market

By Dipo Olowookere

Some foreign exchange (FX) traders in Lagos are biting their fingers hard in lamentation over the strengthening of the Naira against the United States Dollar in the parallel market.

Business Post reports that on Tuesday, the Naira was exchanged with the American Dollar at the black market at N805/$1 compared with the N870/$1 it was transacted on Monday, indicating an appreciation of N65 in less than a day.

This situation is causing some forex traders on the streets to stay away from buying the Dollars at the moment, as they do not know if the US currency will fall further in the coming days.

The Naira weakened to almost N900/$1 in the unofficial FX market last week as a result of a significant rush for the greenbacks.

This was triggered by the decision of the Central Bank of Nigeria (CBN) to change the looks of the N200, N500, and N1,000 notes by next month. The apex bank further said the old notes would no longer be accepted from January 31, 2023.

This announcement by the CBN forced those who had stashed the Naira notes at home to bring them out, and the easiest way to change them was the black market. They started to buy the Dollars at exorbitant rates, putting pressure on the domestic currency.

But over the weekend, the pressure eased on the Naira and today, the Naira seems to have been left off the hook, moving closer to the N700/$1 region it was before the announcement two weeks ago.

“My brother, I don’t understand what is going on again. The Dollar seems to be a bad business at the moment. In fact, most of us now prefer to deal with gold trading because of these uncertainties,” one of the FX sellers, who simply identified himself as Adamu, told Business Post.

But for Alhaji Isa, “This is just for a meantime. The Naira will still remain high before the end of this year. I can also authoritatively tell you that by January 2023, the Naira will go through this pressure again.”