The gap between Nigeria’s official exchange rate and the black-market level narrowed to the least in three weeks after the central bank introduced a measure to increase the supply of dollars to licensed money changers.
The difference between the two rates fell to 24% on Thursday from as much as 32% after the regulator’s announcement on Nov. 30 that it would allow beneficiaries of remittances to be paid in dollars. The naira has strengthened by 6% to 470 per dollar in the parallel market since Monday, according to abokifx.com, while the spot rate weakened 0.6% to 391.90.
Nigeria’s central bank directed banks to pay dollars to the beneficiaries of remittances from abroad via international money-transfer operators to boost supply of the U.S. currency. Recipients were paid the naira equivalent previously. The low greenback liquidity at the official exchange window, where the central bank maintains a largely inflexible rate, has increased demand in the parallel market where the rate is freely determined.
The directive deepened dollar supply and reduced pressures in unofficial exchange markets, said Emmanuel Adeleke, an analyst at Asset Resource Management in Lagos. At the investors and exporters forex window, the gap between demand and supply will remain wide, he said.