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Naira gains on parallel market after CBN’s policy shift on foreign remittances

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Naira strengthened on black market on Tuesday, exchanging at N490 for the United States dollar, following an announcement of the Central Bank of Nigeria (CBN), permitting recipients of diaspora remittances to receive their funds in a foreign currency.

A Monday circular by the regulator said beneficiaries receiving money from abroad through international money transfer operators could now do so in US dollars unlike before when it could only be received in naira, a policy shift targeting deeper liquidity in the currency market.

Naira changed hands at N500 to a dollar on Monday, meaning it strengthened against the greenback at N10 or 2% at the last session, data from abokiFX showed.

Read also: Naira weakens to N478 on parallel market as dollar demand heightens pressure

Meanwhile, naira weakened against the dollar on the spot market called the Investors and Exporters (I&E) forex window, exchanging at N394 for a unit of the US currency, N3.75 or 1% weaker than N390.25 the rate at which it closed at the session before.

Naira hit an intraday low of N396 and oscillated to a high of N380 before closing at N394.

Turnover at this side of the forex market climbed by 379.6% from $35.15 million to $168.57 million.

Last week, daily forex sales at the I&E forex window averaged $169.93 million, compared to the $34.5 million reported in the previous week.

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