Naira Depreciates to N1,620 at Parallel Market

The Nigerian Naira yesterday experienced a slight depreciation in value, trading at N1,620 per dollar in the parallel market, down from N1,615 per dollar on Monday.

Similarly, the Naira depreciated to N1,590 per dollar in the Nigerian Foreign Exchange Market (NFEM), according to data published by the Central Bank of Nigeria (CBN).

The CBN data showed that the exchange rate for the Naira rose to N1,590 per dollar from N1,583 per dollar on Monday, indicating a N7 depreciation for the Naira.

This development has narrowed the margin between the parallel market and NFEM rate to N30 per dollar from N32 per dollar on Monday.

Despite this slight dip in exchange rates, foreign exchange market operators remain optimistic, citing an inflow of 847 million through the NAFEM window, which is higher than the 795 million recorded last week.

The ongoing sales of crude oil to domestic refineries in Naira, which was re-implemented in the last few days, has also helped to relieve initial market tensions and increased demand pressure on the Naira.

However, the trade conflicts between China and the United States have affected the crude oil market, which has a positive correlation with the outlook of the Naira. Crude oil prices are currently trading 10 below the Federal Government’s benchmark, and analysts have projected that they may reach the 50 and $55 level in 2025/2026.

This is expected to have a direct impact on the Naira, as crude oil accounts for about 90% of Forex earnings.

The tariff uncertainty between the US and China has also undermined the dollar, making the forex markets volatile.

The euro and yen have both gained approximately 5% against the dollar in just over two weeks.

The Naira also gained after the announcement of tariff halt, but lost earlier from its imposition, where Nigeria was slammed with a 14% tariff.

In a related development, the CBN has assured Nigerians that it will continue to monitor the forex market and take necessary steps to ensure the stability of the Naira.

The apex bank has also urged Nigerians to remain calm and avoid panic buying of foreign currencies, as the market is expected to stabilize soon.