The Nigerian naira has weakened against the US dollar, trading at N1,395 in the parallel market as of Monday, down from N1,386 recorded the previous week. This represents a depreciation of N9 in the unofficial segment.
Official Market Also Sees Decline
In the Nigerian Foreign Exchange Market (NFEM), the naira depreciated to N1,385 per dollar from N1,384 per dollar last weekend, according to data from the Central Bank of Nigeria (CBN). The indicative exchange rate for the official market rose by N1, reflecting continued pressure on the local currency.
Widening Gap Between Markets
The margin between the parallel and official exchange rates widened significantly to N9 per dollar, compared to just N2 per dollar on Friday last week. This divergence indicates increased demand pressure in the parallel market relative to official channels.
Meanwhile, the interbank turnover at the NFEM surged by 80.3 percent to N223.9 million on Monday, up from N124.2 million recorded at the close of the previous week. The sharp increase in turnover suggests higher activity levels in the official foreign exchange market.
Market analysts attribute the naira's depreciation to sustained demand for dollars amid limited supply, as well as speculative activities in the parallel market. The CBN has continued to intervene in the official market to stabilize the currency, but the widening spread highlights ongoing challenges.
As of the time of reporting, the naira has lost N9 in the parallel market and N1 in the official market within a week, underscoring the currency's volatility in the face of macroeconomic headwinds.
