Naira exchanges for N1,490/$ on parallel market

Naira exchanges for N1,490/$ on parallel market

On Wednesday, the Nigerian naira saw a notable appreciation to N1,490 against the US dollar in the parallel section of the foreign exchange market.

This marks a 2 percent increase compared to the rate of N1,520 reported on May 27.

Currency traders, commonly known as bureau de change operators, quoted the buying price of the dollar at N1,460 and the selling rate at N1,490, resulting in a profit margin of N30.

In contrast, at the official window, the naira experienced a depreciation of 13.26 percent against the dollar, dropping from N1,173.88/$ on May 28 to close at N1,329.65 on Wednesday.

According to data from FMDQ Exchange, which oversees official FX trading in Nigeria, the exchange rate fluctuated between a high of N1,506 and a low of N1,010 during trading hours.

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The daily foreign exchange market turnover stood at $336.54 million.

Recent changes in the foreign exchange market are influenced by the Central Bank of Nigeria (CBN) guidelines released on May 22 for Bureau De Change (BDC) operations in the country.

The CBN increased the capital requirement for tier-1 BDC operators to N2 billion, while tier-2 operators were mandated to have a capital base of N500 million.

However, the Association of Bureau De Change Operators (ABCON) has urged the CBN to reconsider these capital requirements. ABCON proposed reducing the minimum capital base for tier-1 operators to between N500 million and N1 billion, emphasizing the need for flexibility to facilitate mergers among BDCs.

Aminu Gwadabe, president of ABCON, advocated for allowing BDCs to recapitalize instead of requiring them to reapply for licenses, suggesting a more streamlined approach to regulatory compliance.

Naira exchanges for N1,490/$ on parallel market