The Nigerian naira sharply declined to N1,745 per dollar in the parallel market on Wednesday, marking a steep drop from N1,600 recorded last week. While peer-to-peer exchanges quoted rates around N1,715/$, some international money transfer operators and trading platforms listed rates between N1,730/$ and N1,745/$. In contrast, the official exchange rate also depreciated, closing at N1,545/$, down 1.31% from the previous day. The gap between the official and black market rates now exceeds N140, underlining systemic challenges in Nigeria’s forex markets.
Despite a recent rally following the Central Bank of Nigeria’s (CBN) introduction of a new foreign exchange platform, the naira’s gains have faltered. The official market recorded an 8.24% appreciation last week, rising from N1,672.69/$ to N1,535/$. Similarly, the parallel market saw significant fluctuations, with rates dropping from N1,700/$ to N1,570/$ before stabilizing at N1,580/$ over the weekend. However, this week has seen renewed depreciation, particularly in the informal market, unsettling market observers and stakeholders.
The CBN’s FX platform, credited for enhancing market transparency and liquidity, was initially seen as a stabilizing factor. Members of the Organised Private Sector had called for sustained measures to consolidate these gains, citing the potential economic benefits. However, the naira’s ongoing volatility underscores the challenges of aligning Nigeria’s forex systems and restoring long-term confidence in its currency.