Naira rises, dollar falls in parallel market

Naira rises, dollar falls in parallel market

On Friday, the Naira continued to appreciate against the US dollar in the parallel market from 1,160 Naira to 1,155 Naira.

This represents an increase of 0.43 per cent (N5) compared to the N1,160 it traded at the parallel market on Thursday.

It may be recalled that in the parallel market on Wednesday and Thursday, the Naira remained stable, selling for 1,160 Naira each.

However, foreign exchange trading volume on Thursday reached $105.5 million, according to data from NAFEM, the Nigerian Autonomous Foreign Exchange Market, a market trading arm for investors, exporters and end users.

Volume represents the amount of dollars traded on a particular trading day.

While the interest rate remains unfavorable to the business community and Nigerians as a whole, management consultant Babatunde Adeniji said the Naira crisis was mainly driven by speculation due to the country’s liquidity problems.

“When it comes to prices, speculation drives things in the short term. If you are a trader and there is a degree of distrust in the government and there is no clear visible guarantee of where the dollars will come from to stabilize the naira. “If you wanted to bet inside, what position would you take? You would take a dollar-biased position,” he said.

He said the country would begin to breathe a sigh of relief if the authorities were able to pay off all outstanding foreign exchange contracts with sufficient liquidity to meet outstanding obligations.

“Nigeria as a country does not have enough dollars to fulfill its commitments. Grammar will be of no use if we do not do something substantive and tangible,” he said.


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