Joseph Afam | December 3, 2024

The Nigerian naira gained strength on Monday, appreciating to N1,730 per dollar in the parallel market as the Central Bank of Nigeria (CBN) commenced trading on the Bloomberg BMatch system. This marked a N20 improvement from Friday’s rate of N1,750 at the black market.

The CBN’s directive last week mandated all banks in the interbank foreign exchange market to adopt the Electronic Foreign Exchange Matching System (EFEMS) via Bloomberg BMatch. The new system, which became operational today, is expected to enhance transparency and operational efficiency in the foreign exchange (FX) market.

Mixed Performance Across Markets

While the parallel market saw gains, the naira depreciated by 1.69% in the official Nigerian Autonomous Foreign Exchange Market (NAFEM), trading at N1,672.69 per dollar on Friday, compared to N1,644.86 the previous day.

Foreign exchange reserves, however, remained strong, reaching a 34-month high of $40.2 billion in November despite a slight dip towards the end of the month, according to Afrinvest Securities Limited. This represents a month-on-month increase of $436.2 million or 1.1%.

Increased activity in the NAFEM window also contributed to market stabilization, with average daily turnover rising by 16% month-on-month to $365.2 million. Consequently, the naira appreciated marginally month-on-month by 0.2% and 0.3% against the dollar in the NAFEM and parallel markets, respectively.

Outlook for December

Analysts remain optimistic about the naira’s performance for the rest of December. Improved market sentiment, bolstered reserves, and enhanced liquidity are expected to keep the local currency stable. Afrinvest predicts that the naira will continue trading within similar ranges, barring unforeseen disruptions.

The introduction of the Bloomberg BMatch system is a significant step in CBN’s efforts to foster transparency and efficiency in the FX market, signaling potential positive outcomes for Nigeria’s foreign exchange landscape.

By Okafor Joseph Afam | December 3, 2024

The Nigerian naira gained strength on Monday, appreciating to N1,730 per dollar in the parallel market as the Central Bank of Nigeria (CBN) commenced trading on the Bloomberg BMatch system. This marked a N20 improvement from Friday’s rate of N1,750 at the black market.

The CBN’s directive last week mandated all banks in the interbank foreign exchange market to adopt the Electronic Foreign Exchange Matching System (EFEMS) via Bloomberg BMatch. The new system, which became operational today, is expected to enhance transparency and operational efficiency in the foreign exchange (FX) market.

Mixed Performance Across Markets

While the parallel market saw gains, the naira depreciated by 1.69% in the official Nigerian Autonomous Foreign Exchange Market (NAFEM), trading at N1,672.69 per dollar on Friday, compared to N1,644.86 the previous day.

Foreign exchange reserves, however, remained strong, reaching a 34-month high of $40.2 billion in November despite a slight dip towards the end of the month, according to Afrinvest Securities Limited. This represents a month-on-month increase of $436.2 million or 1.1%.

Increased activity in the NAFEM window also contributed to market stabilization, with average daily turnover rising by 16% month-on-month to $365.2 million. Consequently, the naira appreciated marginally month-on-month by 0.2% and 0.3% against the dollar in the NAFEM and parallel markets, respectively.

Outlook for December

Analysts remain optimistic about the naira’s performance for the rest of December. Improved market sentiment, bolstered reserves, and enhanced liquidity are expected to keep the local currency stable. Afrinvest predicts that the naira will continue trading within similar ranges, barring unforeseen disruptions.

The introduction of the Bloomberg BMatch system is a significant step in CBN’s efforts to foster transparency and efficiency in the FX market, signaling potential positive outcomes for Nigeria’s foreign exchange landscape.