Market News

The naira, on Thursday, depreciated to N1,538 per dollar in the parallel market on Friday, down from N1,535/$ recorded.

Similarly, in the Nigerian Foreign Exchange Market (NFEM), the naira slipped to N1,503.5 per dollar from N1,503/$, reflecting a 50 kobo depreciation.

The margin between the parallel market and NFEM rate stood at N32/$, unchanged from Thursday.

However, in the parallel market, the local currency lost N3 after opening the week at N1,530/$.

Nigeria’s economy, heavily reliant on crude oil exports for foreign exchange earnings, is susceptible to global oil price fluctuations.

A decline in oil prices or a drop in production can significantly reduce the country’s foreign currency inflows.

The high demand for foreign currency, driven by the need to import raw materials and finished goods, as well as services like international school fees and medical tourism, further compounds the issue.

The Central Bank of Nigeria has implemented various policies to manage these challenges, including moving away from a dual-exchange rate system in an attempt to unify the official and parallel markets.

Despite these reforms, the parallel market continues to thrive due to a persistent shortage of dollars in the official market.

The current administration’s decision to float the naira has been a major factor in the recent volatility.

This policy, TRIBUNE ONLINE gathered, aimed at allowing market forces to determine the currency’s value, has led to a significant depreciation.