The Nigerian currency, the naira, experienced a notable depreciation against the dollar at the official market, reaching N1,105/$1 at the Nigerian Autonomous Foreign Exchange Market (NAFEM), as reported by DailyTrust.
This decline marked one of the most significant falls in recent times, with the naira opening at N830 earlier in the day before plummeting by over N200. However, the currency rebounded later in the day, closing at 841.14.
Reuters noted that the sharp depreciation brought the official exchange rate close to the parallel market rate. At the parallel market, the exchange rate for dollars opened at N1,135 and closed at N1,150 to N1,200, according to Daily Trust.
Bureau De Change (BDC) operators, such as Alhaji Hassan Sabo in Lagos, reported buying rates at N1,100 and selling rates at N1,150, highlighting the scarcity of dollars in the market.
The uncertain currency situation has prompted discussions on potential solutions. Capital market analyst Samuel Showunmi suggested a return to multiple exchange rates to infuse dollars into the market through BDCs. Showunmi expressed concern about currency racketeering within the banking sector and emphasized the need for effective measures to address the challenges facing the naira.
As the exchange rate fluctuates, market participants, analysts, and the public closely monitor the dynamics, awaiting government responses and interventions to stabilize the currency market.