Mixed Fortunes for Naira: Depreciates at Official Rate, Gains in Parallel Market

The Nigerian Naira fell against the U.S. dollar on Friday, capping off the week with a negative close in the official foreign exchange market. According to FMDQ data, the Naira weakened to N1,678.87 per dollar, down from an exchange rate of N1,639.50 on Thursday, marking a loss of N39.37 in just one day.

In the parallel market, however, the Naira saw a slight gain, appreciating by N10 to close at N1,740 per dollar, compared to N1,750 the previous day. This mixed performance reflects ongoing volatility in the foreign exchange market, even as Nigeria’s Central Bank (CBN) rolls out policies to stabilize the currency.

Adding to the week’s developments, forex transaction turnover surged to $1.4 billion on Friday from just $244.96 million the day before, indicating heightened trading activity. This spike comes amid ongoing CBN measures to address Nigeria’s forex challenges. Earlier this week, the CBN granted commercial, merchant, and non-interest banks permission to manage tradeable foreign currency in domiciliary accounts. This policy, part of the new Foreign Currency Disclosure, Deposit, Repatriation, and Investment Scheme, aims to increase currency availability and support market stability.

Despite these interventions, the Naira has faced persistent fluctuations in recent months, with the currency’s performance reflecting mixed sentiment as it navigates between gains and losses across different market segments.