Naira on Monday depreciated against the dollar by 0.38 percent (N3/$1) at the parallel market, also known as black market following increased demand.
During the intra-day trading on Monday, the dollar quoted at the rate of N773 as against N770 quoted on Friday at the black market.
Traders attributed the naira depression to increased demand for dollars, mostly from individuals who want to travel for education, tourism or for business.
“The demand for dollars is rising and that is the reason the rate is lower today than Friday,” said one of the traders.
Naira depreciated by 0.65 percent on Friday at the Investors and Exporters (I&E) forex window as the dollar was quoted at N770.17 as against N765.13 quoted on Thursday, data from the FMDQ indicated.
The Central Bank of Nigeria (CBN) on June 14, 2023, abolished segments of the official FX market to the I&E Window, where the “Willing buyer and Willing seller” was re-introduced. Based on this adjustment, the official rate rose from N463.38/$ to N632.77/$ and has since averaged N669.0/$, a report by Agusto & Co, a Pan-African Credit Rating Agency, noted.
“Under Godwing Emefiele, the suspended CBN governor’s leadership, Nigeria operated with a multiple exchange rate system that heavily relied on a controlled official rate, resulting in limited liquidity for businesses and individuals. This, in turn, led to increased demand for foreign currency in the parallel market, where exchange rates carried a significant premium, the report said.