The Nigerian currency, the Naira, gained value in the parallel market yesterday, trading at N1,735 per dollar compared to N1,740 per dollar recorded last weekend. However, in the Nigerian Autonomous Foreign Exchange Market (NAFEM), the Naira faced a downturn, depreciating to N1,690.37 per dollar from the previous N1,652.25 per dollar observed last Friday.
According to data from the FMDQ, this reflects a significant N38.12 loss in value for the Naira within the formal market. Despite this, activity in the foreign exchange market saw a marked slowdown. The volume of dollars traded, known as turnover, dropped sharply by 41.6%, falling to $173.14 million from the $296.63 million recorded during the previous weekend.
This development resulted in a narrower gap between the exchange rates in the parallel and official markets. The difference between the two rates decreased to N44.63 per dollar, compared to N87.75 per dollar last week Friday.
Market analysts believe the decline in dollar trading volumes could be linked to tightened liquidity and lower demand. While the Naira’s slight appreciation in the parallel market offers a glimmer of hope, its depreciation in the formal sector highlights ongoing volatility.
