The Nigerian naira witnessed a continued decline against the United States dollar on Thursday, reaching N1,309 at the official market and N1,420 at the parallel market.
This represents a significant depreciation of N90 or 6.8 percent from Wednesday’s rate of N1,330, with currency traders attributing the downward trend to renewed dollar demand pressure.
At the Wuse Zone 4 market, greenback notes were purchased at N1,340 and sold at N1,420, yielding a profit margin of N80.
According to one of the dealers, the surge in demand for the dollar is the primary driver behind the naira’s depreciation, despite efforts by the Central Bank of Nigeria (CBN) to address the situation.
Over the past two weeks, the naira has lost 26.2 percent of its value compared to April 12, 2023, when it stood at N1,125 per dollar on the parallel market.
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Despite the CBN’s recent allocation of $15.83 million to 1,583 Bureau De Change (BDC) operators, aimed at boosting liquidity in the unofficial market, the naira’s downward trajectory persists.
On the official market, the naira depreciated to N1,309.88 against the dollar, marking a 0.10 percent drop from the previous rate of N1,308.52 recorded on Wednesday.
Forex trading volumes also surged by 61 percent, reaching $318.08 million, indicating heightened activity in the market.
CBN Governor Yemi Cardoso recently declared the naira as the best-performing currency globally as of April 2024, attributing this achievement to foreign exchange market reforms and positive sentiment from leading international investment institutions.
However, questions remain about the sustainability of the naira’s stability in the long run, prompting speculation about future strategies by the apex bank.
(Edited by Oludare Mayowa; omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)
