For the second consecutive day, Nigeria’s currency, the Naira, depreciated in exchange rate against the US dollar on Tuesday, to trade at an average of N780/$1 in the black market, representing a 2.77% decline when compared to the N759/$1 it traded in the unofficial market on Monday.
Some FX dealers in the Federal Capital Territory (FCT) attributed the continued depreciation of the local currency in the market to sluggish business trend since the beginning of the week.
However, the Naira strengthened its exchange value against the British Pound Sterling, to trade at an average exchange rate of N953/£1 during the day under review, indicating a slight appreciation of a 0.10% when compared to its exchange rate of N954/£1 recorded in the previous day’s trading session.
Similarly, the Naira gained a 0.12% in exchange for the Euro at the parallel market and traded at an average exchange rate of N815/€1 compared to its N816/€1 rate on Monday.
Data obtained from the cryptocurrency Peer-to-Peer (P-2-P) exchange platform, also showed that the local currency depreciated by 4.69% to trade at a minimum of N800.00/$1 on Tuesday, compared to its exchange rate of N764.15/$1 the previous day.
It would be recalled that the Central Bank of Nigeria (CBN) had been supplying FX to the official and unofficial markets over the past years as part of its monetary efforts to achieve exchange rate stability for the local currency against other foreign currencies, the
The apex bank discontinued its FX interventions at the parallel market early in March 2020 following its findings that some FX dealers were abusing the privilege by engaging in FX round-tripping.
Analysts believe that the Naira will strengthen in value against other currencies at the parallel market in the next few months as the new FX policy measure of the CBN, which authorized deposit money banks (DMBs) and FX dealers to trade based on market-determined rates at the FX markets, continue to gain traction.
The experts further projected that the FX policy would be aided by other fiscal policy measures of the new government to improve the local currency’s exchange rates at the FX markets.
