The Nigerian Naira experienced mixed fortunes in the foreign exchange markets yesterday, depreciating in the parallel market while recording a slight gain in the official Nigerian Foreign Exchange Market (NFEM).
In the parallel market, the Naira fell to N1,510 per dollar from N1,505 per dollar over the weekend, reflecting a N5 depreciation. However, in the official NFEM, the Naira appreciated marginally to N1,499 per dollar from N1,500 per dollar last Friday, according to data published by the Central Bank of Nigeria (CBN).
The contrasting movements in the two markets widened the gap between the parallel market and the official exchange rate to N11 per dollar, up from N5 per dollar last weekend. This growing margin highlights the ongoing challenges in achieving exchange rate stability and narrowing the disparity between the official and unofficial markets.
The depreciation in the parallel market underscores the persistent demand pressures and limited supply of foreign exchange, particularly from informal sources. Meanwhile, the slight appreciation in the official market suggests some level of intervention or improved liquidity from the CBN, though the impact remains minimal.
Economic analysts have expressed concerns over the widening gap between the two exchange rates, noting that it could exacerbate inflationary pressures and undermine investor confidence. They have called for more robust measures to boost foreign exchange supply, stabilize the Naira, and unify the exchange rates across all markets.
The CBN has continued to implement various policies aimed at addressing the foreign exchange crisis, including tightening monetary policy and restricting access to forex for certain imports. However, the effectiveness of these measures remains a subject of debate among stakeholders.
As the Naira continues to face volatility, businesses and individuals are urged to exercise caution and stay informed about market developments. The CBN has assured the public of its commitment to restoring stability to the foreign exchange market and ensuring sustainable economic growth.
