The Naira on Tuesday experienced a notable depreciation in the parallel market, where it fell to N1,600 per dollar.
This marks a decline from its previous rate of N1,590 per dollar observed over the past weekend, signaling ongoing pressure on the Nigerian currency in the unofficial market.
In contrast to the trend in the parallel market, the Naira gained some ground in the Nigerian Autonomous Foreign Exchange Market, where it appreciated to N1,579.22 per dollar.
NAFEM serves as a crucial trading segment where investors, exporters, and end-users conduct foreign exchange transactions based on prevailing market conditions.
Data sourced from the Financial Markets Dealers Quotations platform highlighted the Naira’s performance within NAFEM.
The indicative exchange rate for the market edged down slightly to N1,579.22 per dollar, from N1,579.89 per dollar recorded last Friday.
This slight movement indicates a modest gain of 67 kobo for the Naira in this regulated segment of the forex market.
Adding to the dynamics of the market, there was a significant increase in the volume of dollars traded. The total amount of dollars exchanged in NAFEM surged by 41.4 percent, climbing to $162.99 million from $115.23 million reported last weekend.
This uptick in trading activity underscores the heightened demand for foreign currency, which continues to influence the Naira’s exchange rate.
The divergent movements between the parallel market and NAFEM have led to a widening margin between the two rates.
The gap between the exchange rates expanded to N20.78 per dollar, compared to a margin of N10.11 per dollar observed last Friday. This growing disparity reflects the challenges in achieving convergence between the official and unofficial forex markets.
Despite the Naira’s appreciation in NAFEM, the parallel market’s weakening highlights persistent concerns about the currency’s stability.
Market participants remain vigilant, monitoring the fluctuations and assessing their implications on the broader economy.
As the market evolves, the interplay between supply and demand for dollars will continue to shape the Naira’s trajectory, with implications for businesses, investors, and the overall economic landscape in Nigeria.
