Naira Sustains Appreciation Against the Dollar in Parallel Market
The Nigerian Naira maintained its upward trajectory against the US Dollar in the parallel foreign exchange market on Thursday, marking its second consecutive day of gains this week.
According to Abubakar Alhasan, a Bureau De Change operator in Wuse Zone 4, Abuja, the Naira appreciated to N1,570 per dollar on Thursday, up from N1,575 on Wednesday. This represents a marginal gain of N5 against the dollar within 24 hours. Over the past 48 hours, the Naira has strengthened by N10 in the unofficial market, signaling a slight but notable improvement in its value.
Meanwhile, at the official market, the Central Bank of Nigeria (CBN) has yet to publish foreign exchange data for Thursday, February 13, 2025, as of the time of filing this report. However, on Wednesday, the Naira closed at N1,504.30 per dollar at the official window, maintaining a significant gap between the official and parallel market rates.
This development comes amid heightened anticipation for the release of Nigeria’s January 2025 inflation data, expected in mid-February. The inflation rate has remained a critical concern for the economy, with December 2024 figures hitting 34.80 percent, reflecting persistent inflationary pressures driven by rising food prices, energy costs, and currency depreciation.
The recent appreciation of the Naira in the parallel market, though modest, may offer a glimmer of hope for businesses and consumers grappling with the high cost of imports and dollar-denominated transactions. However, economic analysts caution that the sustainability of this trend remains uncertain, given the structural challenges plaguing Nigeria’s foreign exchange market, including limited dollar liquidity and speculative activities.
Stakeholders have called for more robust measures to stabilize the Naira, including increased transparency in the official FX market, enhanced monetary policies, and efforts to boost foreign exchange earnings through non-oil exports. As the nation awaits the latest inflation figures, the focus remains on whether the CBN and fiscal authorities can implement effective strategies to curb inflation and restore confidence in the local currency.
For now, the Naira’s marginal gains in the parallel market offer a temporary respite, but the broader economic landscape demands more comprehensive and sustainable solutions to address the underlying issues driving currency volatility and inflationary pressures.
Reference
Naira Sustains Appreciation Against the Dollar in Parallel Market