Naira Experiences Weakness At Parallel Market

Naira Experiences Weakness At Parallel MarketThe naira depreciated in the unofficial market on Wednesday, trading at 1,705 per dollar, according to Bureau De Change operators in Lagos and Abuja. Aliyu Sani, a BDC operator in Lagos, reported selling dollars at 1,705 and buying at 1,695. In Abuja, the exchange rate was slightly lower at 1,700.

Currency trader Suraju Ajao noted he sold dollars for 1,700 and bought at 1,690. Meanwhile, on the Nigerian Autonomous Forex Exchange Market, the naira closed at 1,659.69 per dollar, reflecting a 0.04 percent drop from Tuesday’s rate of 1,658.97.

In the official market, the naira fluctuated between a high of 1,682 and a low of 1,562.97 per dollar. Daily turnover in the forex market decreased to $177.10 million, down from $217.86 million the previous day.

On Monday, the naira hit a new low of 1,700 per dollar, marking a 0.29 percent decline from last Friday’s exchange rate of 1,695. The World Bank recently classified the naira as one of the worst-performing currencies in Sub-Saharan Africa for 2024. As of August, the naira had depreciated by approximately 43 percent year-to-date, ranking alongside the Ethiopian birr and the South Sudanese pound.

The decline is primarily driven by a surge in demand for U.S. dollars in the parallel market, limited dollar inflows, and slow foreign exchange disbursements from the central bank.

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