On Friday, the Naira experienced a notable depreciation, dropping to a value of N1,610 per dollar in the parallel market. This marked a decrease from the previous day’s rate of N1,580 per dollar recorded on Thursday. In a similar context, the Naira also saw a decline in the Nigerian Autonomous Foreign Exchange Market (NAFEM) yesterday, where it depreciated to a rate of N1,609.29 per dollar. This shift highlights a broader trend in the currency market.
According to data released by the FMDQ, the indicative exchange rate for NAFEM climbed to N1,609.29 per dollar, which represented an increase from the rate of N1,603.8 per dollar observed on Thursday. This increase indicates that the Naira has depreciated by 5.49 kobo, reflecting pressure on the currency in both formal and informal trading spaces.
Moreover, it’s worth noting that the overall trading volume of dollars in the market saw a significant rise, with turnover increasing by 28.6 percent. The total amount of dollars traded surged to $168.63 million, which is a substantial increase over the $131.09 million traded on the previous Thursday. Such a rise in trading activity suggests heightened market dynamics amidst the ongoing fluctuations in currency valuation.
As a consequence of these developments, the gap between the rates in the parallel market and the NAFEM rate has significantly narrowed. It now stands at just 71 kobo per dollar, a decrease from the much wider margin of 18.8 per dollar that was reported on Thursday. This tightening of the margin may indicate a convergence in market expectations regarding the Naira’s value in relation to the dollar as the trading environment continues to evolve.
