The exchange rate between the naira and the dollar dropped to around N1,745/$1 on the parallel market, marking a sharp decline from the sub-N1,600 levels seen at the end of last week.
As of 10 a.m. on today, findings show several rates exceeding the N1,700/$1 mark, indicating that the gains observed last week may have been a “dead cat bounce,” a market term referring to temporary gains.
Some P2P exchanges quoted the naira at N1,715/$1, while certain IMTOs listed it at N1,745.
Stock trading apps like Bamboo and Trove quoted N1,730/$1 and N1,736/$1, respectively. Meanwhile, in the official market, the naira closed at around N1,525/$1 on Tuesday, marking its strongest close since the introduction of the EFEM.
The gap between the official and black market rates has now widened to around N200, raising concerns about a disconnect between the central bank-managed official market and the parallel market, where most retail trades take place.
The CBN launched the Electronic Foreign Exchange Matching System on December 1.
In a circular signed by the Director of Currency Operations, CBN, Omolara Duke, it was stated that authorized dealers would now conduct all foreign exchange transactions in the interbank FX market through the Electronic Foreign Exchange Matching System approved by the apex bank, with transactions being reflected immediately.
The circular further stated that the new system would improve transparency and governance, while facilitating a market-driven exchange rate that would be accessible to the public.
“The CBN will publish real-time prices and buy/sell orders data from the system, and in collaboration with the Financial Market Dealers Association, publish the rules for the EFEMs. The Nigerian FX Code and revised Market Operating Guidelines for the Nigeria Foreign Exchange Market will also guide market participants,” the circular added.
This development is expected to reduce speculative activities, eliminate market distortions, and enhance the CBN’s oversight capabilities, enabling more effective market regulation.
