Nigeria Economic Concerns as Naira Depreciates to N1,565/$ in Parallel Market, Widening Gap with Official Rates

The Nigerian Naira experienced fluctuations against the US dollar, reaching an intra-day high of N1,582 while witnessing a notable decline in forex turnover, plummeting by 56.58% to $117.87 million.

Both official and black-market exchange rates saw a marginal decrease in the value of the Naira against the dollar, despite recent improvements attributed to the Central Bank of Nigeria’s (CBN) efforts to curb foreign currency speculation and hoarding. At the close of business, the Naira depreciated by 0.26%, settling at N1503 to a dollar, marking a decrease compared to the previous day.

The Naira's performance against other currencies, including the Great British Pound (GBP) and Euro, also experienced marginal depreciation. Additionally, in the cryptocurrency market, the Naira crossed N1,587.40/$1.

The recent reforms by the CBN signal a move towards a market-driven exchange rate mechanism, potentially paving the way for a free float of the Naira, as outlined in a recent circular removing caps on international money transfer operations.

These reforms aim to promote a market-based price discovery system, emphasizing transparency and ethical standards in forex transactions.