Good news for Nigerians, as the Naira has appreciated by 0.26 percent against the dollar on Monday, June 5, with the exchange rate now at N464.67/$1 at the Investors and Exporters (I&E) forex window. Traders attribute this rise to the slowing demand for dollars at the black market, which is also known as the parallel market.
According to reports, the Central Bank of Nigeria (CBN) sold the dollar at a rate of N462.05 per dollar as of June 2, 2023, showing a 27.90 percent decrease in the N465 rate at the official secondary market. This confirms that the CBN has been using multiple exchange rates to manage demands, conserve dwindling reserves, and mask pressure on the Naira. This system has contributed to the existence of a black market, where rates are substantially lower than the spot rate.
While this is undoubtedly good news, it is important to note that the CBN needs to focus on maintaining a stable forex policy and taking further steps towards reforms. The Naira has faced several devaluations in recent years, and this has to lead to a decline in its value. Therefore a sustainable approach must be adopted to ensure that the value of the Naira remains stable against the dollar.