KEY POINTS

• The local currency has continued to struggle in the realm of foreign exchange beyond the BDCAA the Naira today shed more value to close at ₦1,740/$ in parallel market.
• Official NAFEM rate goes down to ₦1,678.87/$.
• Volumes based on the dollar leaps 473% to $1.4 billion.

The Nigerian currency has declined further to ₦1,740 per dollar in the parallel market from ₦1,725 it was the previous trading session.

In the NAFEM, the local currency depreciated to ₦1,678.87 per dollar from a previous rate of ₦ 1,639.50 per dollar. This is equivalent to a depreciation of ₦49.37.

Increased dollar trading volume

Furthermore, FMDQ data show that dollar trading turnover has surged by 473% to $1.4 billion from $244.96 million the previous day. This is the highest trading volume in years implying a possible increase in the demand for the dollar.

Reducing exchange rate differential

The spread between the parallel market and NAFEM rates now stands at ₦61.13, it was ₦85.50 some time back. It is also suggested that this convergence may mark some market responses to the new conditions of the dollar supply and demand.

The devaluation of naira in both markets further depicts an enduring test in Nigeria’s exchange rate courses.

In this case the active increase in turnover shows that it is difficult to maintain the stability of the currency when the demand for it is changing.