The Nigerian naira saw a decline on Friday, trading at N1,425 per dollar in the parallel market, a slight drop from the N1,422 rate observed on Thursday. Official data from the Central Bank of Nigeria showed a similar trend at the Nigerian Foreign Exchange Market, where the currency slipped to N1,381.5 per dollar, a loss of 50 kobo compared to the previous day.
As a result of these fluctuations, the spread between the official and parallel market rates expanded to N43.5 from N41. Despite the depreciation, official market turnover saw a significant boost, jumping 40 percent to $287.8 million on Thursday.
Market participants like Audu Yisa highlighted that the persistent pressure on the naira stems from a sharp imbalance between high demand and a dwindling supply of foreign currency. Importers and individuals managing international school fees are increasingly turning to the parallel market due to difficulties in securing funds through traditional banking channels. Furthermore, trader Nurudeen Danjuma pointed to broader economic challenges, including lower oil revenue and reduced foreign investment, which have limited the influx of dollars into the economy. The tendency for investors to seek refuge in the dollar to preserve wealth during periods of currency instability continues to aggravate market volatility.
