The naira continued its decline on Wednesday, reaching a high of N1,550 per dollar in the foreign exchange (FX) market, marking a notable drop after months of relative stability.
According to data from the Central Bank of Nigeria (CBN), the naira weakened slightly by N2.53 at the close of trading, with the dollar quoted at N1,538.68 compared to N1,536.15 on Tuesday.
Foreign exchange dealers recorded the highest bid rate at N1,550 per dollar, a N10 depreciation from the previous day’s high of N1,540. Meanwhile, the lowest rate on Wednesday was N1,532, compared to N1,520 on Tuesday.
Black Market Trends
At the parallel market, also known as the black market, the naira weakened further due to increased demand for the dollar from end-users.
It closed at N1,585 per dollar, slightly lower than Tuesday’s rate of N1,580.
The naira also declined against other major currencies.
The British pound was traded at N2,020, up from N2,010 on Monday, while the euro depreciated by N30, closing at N1,690 compared to N1,660. However, the Canadian dollar remained stable at N1,150.
Analysts’ Insight
Despite interventions by the CBN to stabilize the currency, analysts at Coronation Asset Management noted that the demand for forex, particularly from foreign investors repatriating funds, continues to put pressure on the naira.
Last week, the naira depreciated by 1.13% in the official NAFEM market, closing at N1,517.24 per dollar, while in the parallel market, it lost 4.46%, settling at N1,570.
The ongoing decline suggests persistent foreign exchange liquidity challenges, despite CBN’s efforts.
The country’s foreign reserves also recorded a slight drop, declining by 0.18% (approximately $67.57 million) to $38.35 billion over the past week.
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