Naira Slides to N1,405/$ in Parallel Market Despite Gains at Official Window

The Nigerian naira recorded mixed performance against the United States dollar on Thursday, weakening in the parallel foreign exchange market while gaining value at the official Nigerian Foreign Exchange Market (NFEM).

In the parallel market, the naira depreciated to N1,405 per dollar from N1,400 on Wednesday.

The latest movement represents a N5 decline in the value of the local currency against the dollar within one trading day.

However, the situation was different in the official market, where the naira appreciated to N1,347.50 per dollar.

Data released by the Central Bank of Nigeria (CBN) showed that the indicative exchange rate improved from N1,351 per dollar recorded on Wednesday to N1,347.50 on Thursday.

The movement represents a N3.50 appreciation for the naira against the dollar at the official market, indicating some improvement in the currency’s position despite the weakness recorded in the parallel market.

As a result of the different movements across the two markets, the exchange-rate gap widened.

The difference between the parallel-market rate of N1,405 per dollar and the official rate of N1,347.50 stood at N57.50 per dollar on Thursday, compared with N49 recorded the previous day.

Meanwhile, trading activity in the official foreign exchange market recorded a marginal increase. Interbank turnover at the NFEM rose by 0.22 per cent to $371.8 million from $370.98 million recorded on Wednesday.

The latest figures highlight the continued volatility in Nigeria’s foreign exchange market, where movements in the official and parallel markets can differ significantly.

The performance of the naira remains closely watched by businesses, importers, investors and consumers because changes in the exchange rate can affect the cost of imported goods and services.

The contrasting movement on Thursday also underscores the ongoing challenges in maintaining stability across Nigeria’s foreign exchange market, even as official-market rates show signs of strengthening.

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