The Naira fell to N1,575 per dollar in the parallel market on Wednesday, down from N1,565. In NAFEM, it dropped to N1,586.71. Trading volume fell 39% to $171.03 million, and the gap between parallel and official rates narrowed. Experts await CBN's response to stabilize the currency.
On Wednesday, the Nigerian Naira saw a notable depreciation in the parallel market, falling to N1,575 per dollar from N1,565 per dollar the previous day. This decline mirrors the broader downward trend in the official Nigerian Autonomous Foreign Exchange Market (NAFEM), where the Naira depreciated to N1,586.71 per dollar, compared to N1,548.76 on Tuesday.
The data from FMDQ Securities Exchange highlighted a significant shift in the exchange rates, reflecting a depreciation of N37.95 for the Naira in NAFEM. This marked a substantial increase from the previous rate, underlining the ongoing volatility in the foreign exchange market.
Moreover, the volume of dollars traded experienced a sharp decrease of 39 percent, with turnover dropping to $171.03 million from $280.92 million traded the day before. This reduction in trading volume indicates a tightening of liquidity in the forex market, which could be contributing to the pressure on the Naira.
The disparity between the parallel market rate and the NAFEM rate also narrowed significantly, reducing from N16.08 per dollar to N11.71 per dollar. This contraction suggests a realignment in the market, possibly due to shifts in forex supply and demand dynamics.
Economic experts and analysts are closely monitoring these developments, as they could signal broader economic implications. The Central Bank of Nigeria (CBN) is expected to respond with measures aimed at stabilizing the currency and mitigating further depreciation. The market remains volatile, with stakeholders awaiting further policy adjustments and interventions from the CBN to restore balance and confidence in the forex markets.
