The Naira has continued its downward trend, depreciating to N1,620 per dollar in the parallel market on Wednesday, down from N1,615 per dollar on Tuesday. This represents a slight but notable decline in the value of Nigeria’s currency against the US dollar.
Naira’s Performance in the NAFEM
In the Nigerian Autonomous Foreign Exchange Market (NAFEM), the Naira also experienced depreciation. The currency fell to N1,606.56 per dollar, compared to N1,594.27 per dollar the previous day. Data from FMDQ indicated an indicative exchange rate for NAFEM of N1,606.59 per dollar, reflecting a N12.32 decrease from Tuesday’s rate.
Increase in Dollar Turnover
Despite the depreciation, the turnover of dollars traded in NAFEM increased by 2.5 percent, reaching $160.94 million from $156.94 million the day before. This rise in trading volume suggests a higher demand for foreign currency amidst the depreciating Naira.
The margin between the parallel market rate and the NAFEM rate narrowed significantly to N13.41 per dollar from N20.73 per dollar on Tuesday. This reduction in the disparity between the two exchange rates indicates a potential stabilization in the parallel market relative to the official NAFEM rate.
The continued depeciation of the Naira across both the parallel and official markets underscores ongoing challenges in Nigeria’s foreign exchange sector. The narrowing margin between the exchange rates and the increase in dollar turnover may signal shifting dynamics in the currency markets as traders and investors respond to the fluctuating value of the Naira.
