By The Nigerian Naira has experienced a notable depreciation against the US Dollar in both the parallel market and the Nigerian Autonomous Foreign Exchange Market (NAFEM). This development underscores the ongoing challenges facing Nigeria’s currency and broader economic landscape.
In the parallel market, the Naira depreciated to N1,560 per dollar, marking a decline from N1,535 per dollar recorded on Tuesday. This represents a depreciation of 25 Naira within a single day in the unofficial market.
Simultaneously, the official NAFEM market saw a similar trend. Data from FMDQ revealed that the indicative exchange rate for NAFEM rose to N1,561.98 per dollar, up from N1,532.58 per dollar on Tuesday. This indicates a significant depreciation of N29.4 for the Naira in the official market.
As a result of these movements, the margin between the parallel market and NAFEM rates has narrowed to N1.98 per dollar, compared to N2.42 per dollar observed on Tuesday. This convergence suggests a closer alignment between the official and unofficial exchange rates, albeit at a depreciated level for the Naira.
The depreciation of the Naira in both markets reflects ongoing pressures on Nigeria’s currency, which may be attributed to various factors including foreign exchange scarcity, economic policies, and global market conditions. These developments are likely to have implications for businesses, investors, and consumers in Nigeria, potentially affecting import costs, inflation, and overall economic stability.
As the situation continues to evolve, market participants and policymakers will be closely monitoring these exchange rate movements and their broader economic impacts. The Central Bank of Nigeria and other relevant authorities may need to consider further measures to address the currency’s depreciation and stabilize the foreign exchange market.
Source: Punchng.com
