Naira weakens against Pound, Euro at parallel market

The parallel market exchange rate has experienced a substantial decline, reaching a low point of N2050 per Great Britain Pound (GBP), reflecting persistent demand pressures that have contributed to the erosion of the currency’s value.

This signifies a significant decrease of 7.32% or N150 compared to the rate of N1,900 recorded the previous day.

Simultaneously, as of 11:54 am on Tuesday, black-market exchange rates have continued to undergo devaluation of the Nigerian Naira.

Similarly, the Naira depreciated against dollar in the parallel forex market, where forex is unofficially traded, with the exchange rate quoted at N1,630/$1, reflecting a 1.84% decrease from the N1,600 rate it closed at the previous day.

Additionally, the Naira weakened against the Euro by 0.57%, trading at N1750/EUR1 compared to N1740/EUR1 reported the previous day.

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Market analysts attribute the recent decline to a consistent surge in demand for dollars that has been evident since the commencement of January. The primary contributors to this heightened demand include:

The recent decline in the Naira’s value across official and parallel markets has prompted suggestions from financial experts to mitigate currency volatility and prevent further depreciation.

The CBN had announced a series of measures aimed at enhancing transparency and stability in the foreign exchange market while addressing malpractices.

However, while the analysts acknowledge the positive aspects of the CBN’s recent policies aimed at managing pressures in the foreign exchange market, they highlight that these measures fail to directly address the fundamental issue of limited supply.