KEY POINTS
- The Naira fell to N1,660 per dollar in the parallel market, compared to N1,645 last week.
- In NAFEM, the Naira appreciated to N1,580.46 per dollar, up from N1,593.32.
- The margin between the parallel and official rates widened as dollar turnover dropped by 22 percent.
The Nigerian Naira has maintained its trend of decline in the parallel market having weakened to N1,660/$ yesterday from N1,645 per dollar last Friday.
However, during the same period the Naira improved slightly in the Nigerian autonomous foreign exchange market (NAFEX) to close at N1,580.46 per dollar as compared to N1,593.32 per dollar over the weekend.
The current exchange rate of Naira has also raised some notable worries with regard to the existence of a large difference between the parallel market and the official NAFEM rates.
The information obtained from FMDQ showed that, the Naira in NAFEM had an appreciation by the sum of N12.86 gain. But while there has been this positive shift, many equities in NAFEM’s turnover declined by 22% with the figures getting to $197. 37 million from the previous $254.17 Million. That is 1 million less when compared to the record last weekend.
Widening gap between parallel market and NAFEM rates raises concerns
Consequently, movements in these markets led to an increased spread between the parallel market, and NAFEM to N79. 54 per dollar as against N51.68 per dollar just one week ago.
This is contrary to the expectation stating that the central bank has influence on the parallel market acts as an affirmation of the fact that the gap between the parallel market and the official exchange rate continues to expand due to different economic forces both locally and internationally that affect the performance of Naira.
Despite appreciating in NAFEM, analysts think that reduced turnover in it, plus depreciation in the parallel market remains an issue the country’s foreign exchange worth is still facing.
Experts opined that although the Naira has strengthened in NAFEM it is a mixed blessing with low turnover and a decline in the parallel markets suggesting that the Nigerian foreign exchange position remains a worry.
The widening gap also depicts the level of increasing hardship that business persons and people in general who depend on the parallel market to obtain the foreign currency.
