The Nigerian Naira strengthens against the US dollar, surging by 9.68% to ₦1,339.33/$ in the official forex market. However, facing a slight dip in the parallel market, the Naira trades at ₦1,520 to the dollar. Central Bank attributes volatility to seasonal fluctuations, while forex turnover witnesses a significant 67.50% decrease.
Amidst the global economic landscape, the Nigerian Naira witnessed a remarkable surge against the US dollar, closing at ₦1,339.33/$ in the official foreign exchange market on Monday, marking a substantial 9.68 percent increase from Friday's rate.
However, this positive trend was met with a slight depreciation in the parallel market, where the Naira traded at ₦1,520 to the dollar, indicating ongoing volatility in the forex markets.
Governor Olayemi Cardoso of the Central Bank of Nigeria attributed this volatility to seasonal fluctuations during a recent press briefing, emphasizing the role of market dynamics in driving demand and supply. Despite the Naira's gains, forex turnover saw a significant decline, dropping by 67.50 percent to $180.80 million, signaling reduced transaction volume.
Moreover, data from the CBN revealed a 42 percent year-on-year decrease in foreign exchange demand for importation and other forex-related activities, reflecting a broader reduction in sectoral forex allocation.
This downward trend, evidenced by a 41.9 percent drop in sectoral forex allocation in 2023, underscores the evolving dynamics shaping Nigeria's forex market and its broader economic landscape.
