The Nigerian Naira witnessed a decline of 1.48 percent on Wednesday, despite a boost in dollar liquidity in the official foreign exchange (FX) market.
Data from the Financial Markets Dealers’ Quotations (FMDQ) revealed that the dollar closed at N756.21 at the end of trading on the Investors’ and Exporters’ (I&E) forex window. This marked a depreciation compared to the N745.19 rate quoted on the previous day, indicating ongoing pressure on the Naira.
This depreciation in the Naira’s value can be attributed to the sustained high demand for dollars, even though there was a slight uptick in FX liquidity. The daily foreign exchange market turnover increased by 17.97 percent, reaching $95.70 million on Wednesday, compared to $81.12 million recorded on Tuesday.
While the market did experience an improvement in trading activity, with willing buyers and sellers bringing more dollars to the table, it proved insufficient to meet the heightened demand for the greenback.
In contrast to the official market, the parallel market, often referred to as the black market, saw the Naira strengthening against the dollar as the day progressed. By the close of business, the dollar was quoted at N1,000, having gained N5 from its earlier rate of N1,005 during morning trading.
These developments reflect the ongoing challenges faced by Nigeria’s foreign exchange market, where the Naira continues to grapple with external pressures and fluctuating demand for the dollar. The situation remains closely monitored by both financial analysts and government authorities, as they work to stabilize the currency and enhance foreign exchange liquidity.
The volatility in the Naira’s value underscores the need for sustained efforts to address the underlying economic factors that contribute to these fluctuations and create a more stable environment for the country’s currency.