Naira holds steady at N1,570/$1 in parallel market amid forex volatility

The Nigerian naira has demonstrated relative stability in the parallel market, maintaining an exchange rate of N1,570 per US dollar from Wednesday through Friday.

This period of steadiness follows earlier fluctuations in the foreign exchange market earlier in the week, from Monday to Wednesday.

Market reports indicate that the naira closed at N1,570/$1 on Thursday and maintained the same rate on Friday, signaling a temporary halt in depreciation.

A Bureau De Change (BDC) operator in Wuse Zone 4, Abuja, confirmed the stability of the exchange rate, emphasizing that there were no significant movements in the value of the currency over the two-day period.

However, the naira experienced a slight weakening earlier in the week, depreciating to N1,570/$1 on Wednesday from N1,565/$1 on Tuesday before stabilizing.

Meanwhile, in the official market, data from the Central Bank of Nigeria (CBN) showed that the naira closed at N1,513.00/$1 on Wednesday and slightly depreciated to N1,515.00/$1 on Thursday, reflecting a marginal N2 decline.

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As of Friday, CBN data indicated that the naira traded at N1,506.87/$1 for buying and N1,507.87/$1 for selling, underscoring relative stability in the official market despite ongoing pressures.

In addition to the US dollar, the naira’s exchange rate against other major foreign currencies exhibited varying trends throughout the past week in the parallel market.

The British pound experienced fluctuations, reaching N2,000 on February 13 before slightly declining to N1,985 on February 14. Similarly, the euro traded within a relatively stable range of N1,595 to N1,620 over the week.

While the naira appears to have settled at N1,570/$1 in the parallel market, analysts warn that future exchange rate movements will be influenced by several key factors, including foreign exchange inflows, remittances, and policy interventions by the CBN.

Additionally, the supply of dollars from autonomous sources has played a crucial role in sustaining the current trend.

To address ongoing currency pressures, the CBN has implemented several measures aimed at strengthening the naira.

These include boosting dollar liquidity in the official market and enforcing stricter regulations on BDC operators to curb speculative trading. Market analysts suggest that these interventions will continue to shape the trajectory of the naira in the coming weeks.

The naira has lost approximately 70% of its value against the US dollar since the Nigerian authorities loosened foreign exchange controls in 2023.

Despite this, the CBN has remained proactive in its approach, implementing policy measures designed to stabilize the currency. These include enhancing forex supply mechanisms and refining regulatory frameworks for forex market participants.