The naira recovered on Wednesday after a one-week losing streak, closing stronger at N1,459.09 per dollar on Wednesday, May 15, 2024.

Traders quoted the dollar at an intra-day high of N1,590 per dollar and a low of N1,399.20 amid a surge in dollar demand. According to data from the FMDQ Exchange, Forex turnover at NAFEM surged by 124.56% to reach $289.14 million on Wednesday, May 15, 2024.

However, on Thursday, May 16, 2024, the market turnover dropped marginally 5.63 to $272.86 million. On Thursday, May 16, 2024, the naira fell in the parallel market to trade at N1,540 per dollar from the N1,530 recorded on Wednesday, May 15, 2024.

The gap between the official and black market narrows

According to reports, the margin between the parallel market and NAFEM rates narrowed to N6.01 per dollar from N70.98 on Wednesday, May 15, 2024.

Analysts believe the decline in forex liquidity in the official market may have contributed to the naira’s depreciation. Maurice Ibeh, a financial analyst and Forex trader, said Nigerians' high demand for dollars is due to increased demand from importers and medical tourists. “What we have now is that high demand is due to people asking for forex for medicals abroad and importers looking to get quick forex amid frequent changes in Customs Exchange rate by CBN.” “Importers are constantly on edge when opening Form M as the CBN can adjust the rate any moment,” Ibeh said.