In the parallel market, the Naira strengthened to N1,590 per dollar, up from N1,600 per dollar over the weekend. However, in the NFEM, the Naira weakened slightly, dropping to N1,549 per dollar from N1,548 per dollar last Friday, according to data released by the Central Bank of Nigeria (CBN).
Narrowing Gap Between Official and Parallel Rates
The disparity between the parallel market rate and the official NFEM rate narrowed to N41 per dollar, down from N52 per dollar last weekend. This reduction in the margin reflects ongoing efforts to stabilize the foreign exchange market and align the rates across different trading windows.
The CBN’s indicative exchange rate, which serves as a benchmark for the official market, showed a marginal depreciation of N1 for the Naira. This slight decline underscores the challenges faced in maintaining exchange rate stability amid fluctuating demand for foreign currency.
Implications for the Economy
The mixed performance of the Naira highlights the complexities of Nigeria’s foreign exchange market, where multiple rates coexist. The narrowing gap between the parallel and official rates is a positive development, signaling progress toward achieving a more unified exchange rate system.
However, the slight depreciation in the official market suggests that demand pressures persist, necessitating continued interventions by the CBN to ensure stability. Analysts and market participants will be closely monitoring the CBN’s policies and actions in the coming weeks to gauge their impact on the Naira’s performance.