Naira Falls Further Against Dollar at Official and Parallel Markets

The Naira continued to lose value against the US Dollar on Tuesday at both the official and parallel foreign exchange markets.

According to data from FMDQ, the Naira depreciated to N881.88/$1 at the official market from N814.60/$1 on Monday, a drop of N67.28.

This is the second consecutive day that the Naira slumped at the official market, where it closed at N793.50/$1 on Friday.

At the parallel market, the Naira also weakened, exchanging at N1145/$1 on Tuesday from N1,115/$1 on Monday, a decline of N30.

The parallel market is where individuals and businesses buy and sell foreign currencies without the intervention of the Central Bank of Nigeria (CBN).

The CBN governor, Dr Olayemi Cardoso, who spoke at the Chartered Institute of Bankers of Nigeria (CIBN) 50th-anniversary event last week, acknowledged that the unstable exchange rate was affecting business growth and assured that the CBN would be transparent and fair in its operations.

He also expressed confidence and optimism that the CBN could restore macroeconomic stability and address the fundamental flaws in the economy.

However, Cardoso has not held a Monetary Policy Committee meeting for the second time since he became the CBN governor in September. The MPC is the body that determines the monetary policy stance of the CBN, including the interest rate and the exchange rate regime.

The Naira has been under pressure since the CBN introduced reforms in June this year, which aimed to unify the multiple exchange rates and increase the supply of foreign exchange in the market.

However, the reforms have not yielded the desired results, as the demand for foreign exchange continues to outstrip the supply, leading to a widening gap between the official and parallel market rates.

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