Naira Depreciates to Fresh Rate in Parallel Market

On Friday, the Nigerian naira experienced a depreciation in the parallel market, trading at N1,495 per dollar, a slight decline from the N1,490 per dollar rate observed on Thursday.

In the Nigerian Foreign Exchange Market (NFEM), the naira also weakened, closing at N1,421.9 per dollar, compared to N1,421.5 per dollar the previous day.

Data from the Central Bank of Nigeria (CBN) indicated that the indicative exchange rate increased to N1,421.9 per dollar, reflecting a 4 kobo depreciation.

This shift has widened the gap between the parallel market and the official exchange rate to N73.1 per dollar, up from N68.5 per dollar the day before.

Throughout the week, the naira fell by N1.4 against the dollar in the official market, while it remained stable at N1,495 per dollar in the parallel market. Analysts at Cowry Asset Management Plc anticipate that the naira will continue to face pressure in the near term.

In their Weekly Financial Market Review, the firm stated:

“The naira is expected to remain under pressure in the near term due to foreign exchange (FX) demand pressures and structural imbalances, though rising external reserves may provide some support.

“Oil prices are likely to remain volatile, driven by geopolitical risks in the Middle East and supply factors related to the Organization of Petroleum Exporting Countries (OPEC).”