Why Naira is gaining against US dollar at the black market 

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NEWSBUSINESS
November 17, 2021


 
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.

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Nairametrics reported that 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.

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