Naira Depreciates to ₦1,407/$ in Parallel Market Amid Renewed Forex Pressure
The Nigerian naira weakened further in the parallel foreign exchange market, depreciating to ₦1,407 per United States dollar from ₦1,400/$ recorded at the close of last week, reflecting renewed pressure on foreign exchange demand. The latest movement also coincided with a slight depreciation in the official Nigerian Foreign Exchange Market (NFEM), highlighting continued volatility in the country’s currency market.
Data released by the Central Bank of Nigeria (CBN) showed that the indicative exchange rate at the official market also weakened to ₦1,364/$, compared to ₦1,361/$ at the previous trading session. As a result, the gap between the parallel market and the official exchange rate widened to ₦43 per dollar, up from ₦39 recorded last week.
Market data further indicated that activity in the official foreign exchange window slowed significantly, with interbank turnover falling by 55.5 per cent to $39.6 million, down from $89.03 million at the previous session. Financial analysts attributed the naira’s latest depreciation to sustained demand for foreign currency in the informal market and fluctuations in market liquidity.
Despite ongoing foreign exchange reforms by the Central Bank of Nigeria aimed at improving liquidity, enhancing transparency and attracting foreign investment, market participants say exchange rate stability will depend largely on increased dollar inflows, stronger export earnings and continued investor confidence. Economists believe sustained monetary and fiscal reforms remain critical to narrowing the gap between the official and parallel foreign exchange markets.
