The Naira experienced a further decline yesterday, falling to N1,590 per dollar in the parallel market, down from N1,580 on Monday. Similarly, in the Nigerian Autonomous Foreign Exchange Market (NAFEM), the currency depreciated to N1,582.09 per dollar, compared to the previous day’s rate of N1,570.99.
Data from FMDQ indicates that the indicative exchange rate for NAFEM rose by N11.1, closing at N1,582.09 per dollar, up from N1,570.99 on Monday. Additionally, dollar trading volume in the market saw an 18.2% drop, decreasing to $201.43 million from $246.44 million.
Consequently, the gap between the parallel market rate and the NAFEM rate narrowed to N7.91 per dollar, compared to N10.8 per dollar the previous day.
Currency trader Isa Garba attributed the Naira’s depreciation to increased demand and reduced dollar supply.
“When you see the naira closing the market at an appreciation, it means that there was increased demand and adequate supply of dollar during the period.
“Today the naira depreciated against the dollar by N10. I bought a dollar at N1580 and sold it for N1,590 as against yesterday. Today there is less supply of dollars. The dollar was traded at N1,600 per dollar this morning and closed at N1,590.
“Due to the low supply, few traders were present in the market adding to the demand and supply pressure.”