On Monday, the Naira faced a slight dip in the parallel market, trading at ₦1,510/$1, down from ₦1,505/$1 recorded over the weekend. This represents a ₦5 depreciation in the unofficial market, signaling continued volatility in the exchange rate.
However, the Naira saw a modest appreciation in the Nigerian Foreign Exchange Market (NFEM), strengthening to ₦1,499/$1 from ₦1,500/$1 last Friday. This movement indicates a ₦1 improvement in the official exchange rate, suggesting a slightly more stable trend within the formal market compared to the fluctuations seen in the parallel market.
This shift has expanded the spread between the parallel market and NFEM rates, increasing the margin from ₦5/$1 last weekend to a wider ₦11/$1 on Monday. The widening gap between the two markets underscores the ongoing disparity in the exchange rate, a common feature of Nigeria’s foreign exchange landscape as demand for hard currency continues to outpace supply.
The Central Bank of Nigeria (CBN) data, which highlighted this movement, reveals an interesting dynamic in the nation’s currency market, where official interventions and market forces are continually at play. As businesses and individuals navigate these fluctuations, the difference between the parallel and official rates remains a key factor in shaping the nation’s economic outlook.
As the Naira continues to face pressure in the parallel market, many are keenly observing whether the official market rate will continue to strengthen or if the parallel market will push back in response to broader economic pressures.
