In a surprising twist, Nigeria’s Naira appreciated significantly in the parallel market yesterday, rising to N1,730 per dollar from N1,740 per dollar last weekend. This upward swing signals a potential boost in investor confidence and improved liquidity.
However, the official market told a different story. The Naira depreciated to N1,670.65 per dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM), marking a N70.65 decline. This downturn led to a substantial 71.5% drop in the volume of dollars traded, from $284.93 million to $81.17 million.
Despite this mixed performance, the margin between the parallel market and NAFEM rates narrowed to N59.35 per dollar, a significant reduction from N140 per dollar last week.
Experts attribute the parallel market’s appreciation to increased dollar supply and improved market sentiment. Meanwhile, the official market’s depreciation may be linked to reduced dollar inflows.
As Nigeria’s economy continues to navigate global market fluctuations, the Naira’s performance remains a key indicator of the country’s financial health. Yesterday’s mixed results underscore the complexities of Nigeria’s foreign exchange market.
What’s Next?
Will the Naira sustain its parallel market gains? How will the Central Bank of Nigeria’s foreign exchange management strategies impact the market? Stay tuned for further updates on Nigeria’s economic journey.
Source: Vanguard
