The Nigerian naira experienced another decline on Tuesday in the official market, narrowing the disparity between the bank rate and the street rate to less than 1 percent. This marks the closest proximity between both rates since mid-June when the Central Bank of Nigeria (CBN) adopted a more flexible approach to naira trading against the US dollar.
In intra-day trading, the exchange rate at the official market momentarily surpassed the street rate, reaching N1,531 per US dollar. However, the naira concluded the day weaker than the previous session, closing at N1,482 per dollar in the official market and N1,490 per dollar in street trading. This movement reflects heightened demand amidst currency shortages.
Analysts and investors are monitoring the situation closely to determine whether the gap between official and street rates will remain narrow or widen again. Ayodeji Ebo, Managing Director/CBO of Optimus by Afrinvest, expressed concerns about the naira’s continued decline, attributing it to significant oil theft, which has reduced foreign exchange (FX) supply to the CBN.
Source: Business Day