Naira depreciates to N1,407/$ in parallel market
By Aboki Forex —
The naira fell to N1,407 per dollar in the parallel market yesterday, down from N1,400 per dollar last Friday. The official market also weakened as the naira dropped to N1,364 per dollar in the Nigerian Foreign Exchange Market (NFEM).
Parallel and official rates both weaken
Data from the Central Bank of Nigeria (CBN) showed the indicative exchange rate in the NFEM rose to N1,364 per dollar from N1,361 per dollar last weekend. That is a depreciation of N3 for the naira. The parallel market rate slipped by N7 over the same period, pushing the gap between the two markets wider.
Margin between markets widens
The difference between the parallel and official rates expanded to N43 per dollar yesterday from N39 per dollar last Friday. A wider margin often signals increased demand pressure and reduced liquidity in the official window.
Interbank turnover crashes
Trading activity in the NFEM dropped sharply. Interbank turnover fell by 55.5 percent to N39.6 million yesterday from N89.03 million last weekend. Lower turnover suggests fewer transactions at the official window, which may put further pressure on the parallel market rate.
For the naira and Nigerian businesses, a weaker currency raises the cost of imported goods and inputs. The widening spread between official and parallel rates also creates uncertainty for traders who rely on the official window for foreign exchange.