Naira falls to N1,600 per dollar in the parallel market, reflecting ongoing economic challenges. Learn more about the causes and implications of this depreciation.
On Monday, the parallel market witnessed a notable reduction in the value of Naira as it slipped from N1,590 per dollar over the weekend to settle at N1,600 per dollar.
A marginal increase was observed in the Nigerian Autonomous Foreign Exchange Market’s (NAFEM) official exchange rate, resulting in a stronger Naira valued at N1,579.22 per dollar compared to last Friday’s figure of N1,579.89 per dollar; implying an insignificant improvement of 67 kobo for the currency on this platform.
NAFEM witnessed a surge of 41.4% in the volume of dollars traded, with an exchange worth $162.99 million as compared to last weekend’s $115.23 million, according to statistics from FMDQ data sources’. However, despite this growth in trading activity and transactions, there was remarkable disparity observed between NAFEM rate and parallel market rate which grew significantly wide margining up at N20.78 per dollar contrasted against previous week’s close proximity measure totaling at just N10.11 per dollar on Friday.”
The continuous unpredictability in Nigeria’s foreign exchange environment is emphasized by the irregular changes in the exchange rates and the increasing disparity between its official and parallel markets.
The challenges in stabilizing the Naira faced by the Central Bank of Nigeria (CBN) are emphasized by this current development, which is influenced by fluctuating demand and supply dynamics experienced in both formal and informal forex markets.
Market participants and stakeholders will keep a watchful eye on how the CBN and financial authorities tackle disparities amidst the Naira’s ongoing pressure, along with its impact on the wider economy.
