Why Naira is gaining against US dollar at the black market 

 Why Naira is gaining against US dollar at the black market 

Naira strengthened against the US dollar last week to a 2-month high of N535/$1 at the black market, thereby reducing the gap between the parallel and the official rates; an uptick that was driven by a significant drop in demand for FX at the black market.

The exchange rate, which had hovered around N570 to N572 to a dollar since September, gained over 600 basis points to N535/$1 in the early hours of Thursday, last week as BDC operators hinged it to improved forex liquidity and decrease in demand. It currently trades between N545-N550 at the black market depending on who you buy from.

Meanwhile, the gain at the black market has been attributed to a couple of factors, ranging from crude oil rally, boost in external reserves, increased corporate loans from the international debt market, workers remittances amongst others.

Foreign loans drive foreign exchange gain

A major boost in the country’s forex reserve via the $4…

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