The Nigerian naira experienced a significant increase on Wednesday, reaching N1,490 against the US dollar in the parallel section of the foreign exchange market. This represents a 2 percent rise compared to the rate of N1,520 reported on May 27.

Currency traders, also known as bureau de change operators, quoted the buying price of the dollar at N1,460 and the selling rate at N1,490, resulting in a profit margin of N30.

In contrast, the naira depreciated by 13.26 percent against the dollar at the official window, falling from N1,173.88/$ on May 28 to close at N1,329.65 on Wednesday.

Data from FMDQ Exchange, which oversees official FX trading in Nigeria, reveals that the exchange rate fluctuated between a high of N1,506 and a low of N1,010 during trading hours.

The daily foreign exchange market turnover amounted to $336.54 million.

These recent developments in the foreign exchange market are influenced by the guidelines released by the Central Bank of Nigeria (CBN) on May 22 for Bureau De Change (BDC) operations in the country.

The CBN raised the capital requirement for tier-1 BDC operators to N2 billion, while tier-2 operators were required to have a capital base of N500 million.

However, the Association of Bureau De Change Operators (ABCON) has urged the CBN to reconsider these capital requirements. ABCON suggests reducing the minimum capital base for tier-1 operators to between N500 million and N1 billion, emphasizing the importance of flexibility to facilitate mergers among BDCs.

Aminu Gwadabe, the president of ABCON, advocates for allowing BDCs to recapitalize instead of requiring them to reapply for licenses, proposing a more streamlined approach to regulatory compliance.