There are indications that the speculators have begun dumping the hard currency they had been holding, putting the foreign exchange market in a buyer's market. Hence, the naira might be headed for a N1,300 recovery.
The local currency's slow recovery appears to have accelerated over the last two days, as the dollar plummeted to N1,490/$ on Wednesday, March 20.
The Guardian found that most traders are more eager to sell their holdings even though end users are holding off on making purchases because they think there is still potential for the local currency to appreciate.
Even though N1,300/$ is within reach, several dealers told the media outlet that the dollar may reach N1,200/$ in a few days. The official Nigerian Autonomous Foreign Exchange Market (NAFEM) currently offers a greater dollar exchange rate, while the parallel market offers naira at a discount. On Wednesday, at NAFEM, the naira closed at N1,492.61/$.
The data indicates that the official - parallel market differential will approach zero. Recall that days after the market was liberalised last year, similar parity was achieved, but the arbitrage gradually formed, seeing it reach 50% at some point.
On the peer-to-peer platform, which the government blamed partly for the woes of the local currency, the naira traded yesterday at around N1,200 for USDT, a stablecoin pegged on the dollar at an exchange rate of one-for-one.
The international digital currency exchange Binance closed its peer-to-peer platform following a confrontation with the authorities. However, traders have adopted alternative platforms like Kucoin and Gate.io.
In a recent report, the CBN revealed that it has fulfilled the promise to pay all valid foreign exchange forwards liability. It noted that all claims have finally been cleared, easing pressure on the foreign exchange market.
In another development, it was reported that the CBN had lifted the restrictions on forex access for importing milk and dairy products into Nigeria.
The local currency's slow recovery appears to have accelerated over the last two days, as the dollar plummeted to N1,490/$ on Wednesday, March 20.
The Guardian found that most traders are more eager to sell their holdings even though end users are holding off on making purchases because they think there is still potential for the local currency to appreciate.
Even though N1,300/$ is within reach, several dealers told the media outlet that the dollar may reach N1,200/$ in a few days. The official Nigerian Autonomous Foreign Exchange Market (NAFEM) currently offers a greater dollar exchange rate, while the parallel market offers naira at a discount. On Wednesday, at NAFEM, the naira closed at N1,492.61/$.
The data indicates that the official - parallel market differential will approach zero. Recall that days after the market was liberalised last year, similar parity was achieved, but the arbitrage gradually formed, seeing it reach 50% at some point.
On the peer-to-peer platform, which the government blamed partly for the woes of the local currency, the naira traded yesterday at around N1,200 for USDT, a stablecoin pegged on the dollar at an exchange rate of one-for-one.
The international digital currency exchange Binance closed its peer-to-peer platform following a confrontation with the authorities. However, traders have adopted alternative platforms like Kucoin and Gate.io.
In a recent report, the CBN revealed that it has fulfilled the promise to pay all valid foreign exchange forwards liability. It noted that all claims have finally been cleared, easing pressure on the foreign exchange market.
In another development, it was reported that the CBN had lifted the restrictions on forex access for importing milk and dairy products into Nigeria.