The naira recorded a mixed performance against the US dollar on Wednesday, gaining in the parallel market, while weakening in the official Nigerian Foreign Exchange Market (NFEM).
The development has renewed attention on the widening gap between Nigeria’s official and parallel exchange rates as the local currency continues to trade differently across the two markets.
The dollar to naira exchange rate today stood at N1,370 per dollar in the parallel market, an improvement from the N1,375 recorded previously.
However, the naira moved in the opposite direction at the official market, with the exchange rate rising to N1,329 per dollar from N1,328.
Data from the Central Bank of Nigeria showed that the indicative NFEM exchange rate moved by N1, indicating a weaker naira against the dollar in the official market.
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The contrasting movements mean that while the naira strengthened by N5 in the parallel market, it lost N1 in the official market.
The latest movement also reduced the gap between the two foreign exchange markets.
The difference between the parallel-market rate of N1,370 and the official rate of N1,329 stood at N41 per dollar, compared with N47 recorded previously.
This means the spread between the two markets narrowed by N6 despite the naira recording different movements across the trading platforms.
For Nigerians and businesses that depend on foreign exchange, the divergent rates remain significant because the cost of accessing dollars can vary considerably depending on the market involved.
Meanwhile, trading activity in the official foreign exchange market recorded a sharp decline.
Interbank turnover in NFEM fell by 62.05 per cent to $105.95 million, down from $279.2 million previously.
The sharp drop represents a decline of more than $173 million in reported turnover, highlighting a significant reduction in the volume of transactions recorded in the market.
The latest figures come as the naira continues to experience pressure and volatility despite recent attempts to narrow the difference between official and parallel-market rates.
For consumers monitoring the dollar to naira exchange rate today, the latest figures show that the direction of the currency remains uneven, with gains in the parallel market yet to translate into a stronger official-market rate.
The naira’s latest performance is therefore likely to keep attention focused on the sustainability of recent exchange-rate movements and the availability of foreign exchange in the Nigerian market.
