Naira Dips to N1,260/$ in Parallel Market, Widening Gap with Official Rate

  

The Nigerian Naira fell to a new low of 1,260 Naira to the dollar on the parallel market yesterday, down 20 Naira from 1,240 Naira to the dollar the previous day.

 The decline followed a similar trend on the Nigerian Foreign Exchange Market (NAFEM) where the Naira depreciated to 890.

54 Naira to the dollar, a depreciation of 15.

75 Naira to the dollar compared to Thursday’s 874.

79 Naira to the dollar.

 Data from the Foreign Exchange Market Development and Quotation System FMDQ revealed this devaluation, showing that the gap between the official exchange rate and the parallel market exchange rate is widening.

 The difference between the two markets yesterday was 369.

46 naira to the dollar, widening from the 365.

21 naira to the dollar recorded on Thursday.

 Economists and citizens alike are concerned about this devaluation of the Naira  as it could affect the country's economy.

 A weaker naira means  businesses and individuals will have to spend more to buy imported goods and services, potentially leading to  inflation.

 Moreover, a weaker naira could make it more difficult for businesses to repay  foreign currency loans, further impacting the economy.

 The Central Bank of Nigeria (CBN) has taken various measures to stabilize the naira and curb its devaluation.

 These measures include the introduction of new  exchange rate policies, import restrictions on  certain goods, and intervention in  foreign exchange markets.

 However, despite these efforts, the naira continues to face challenges due to factors such as Nigeria's dependence on imported goods, high demand for foreign exchange, and global economic uncertainty.

 Analysts believe that resolving the underlying structural problems contributing to the devaluation of the naira is necessary for long-term stability.

 This includes diversifying Nigeria's economy, increasing non-oil exports, and tackling the country's import dependence.

 Additionally, maintaining transparency and effective communication in the foreign exchange market helps build trust between investors and companies.

 The Nigerian government and the CBN  need to work together to implement policies that  support the naira and promote economic growth.

 It also requires stakeholders from different sectors  to work together to find innovative solutions that  contribute to a more stable and sustainable foreign exchange market in Nigeria.