The Nigerian naira experienced a sharp decline of 3.5% against the dollar on Thursday in the parallel (black) market, with the dollar being quoted at N1,580, compared to N1,525 the previous day. This depreciation reflects a N55 loss for the local currency. Just a month ago, the naira had briefly appreciated to as high as N1,485 per dollar, but the current regression highlights the ongoing instability in the foreign exchange (FX) market.
Thank you for reading this post, don't forget to subscribe!Ayokunle Olubunmi, head of financial institution ratings at Agusto & Co., noted that while the naira’s devaluation in 2025 may not be as severe as in 2024, further depreciation is still expected. Olubunmi emphasized that the current currency fluctuations are indicative of broader economic challenges.
Aminu Gwadabe, president of the Association of Bureaux De Change Operators of Nigeria (ABCON), pointed out several factors contributing to the naira’s struggle. He highlighted constraints faced by Bureau de Change (BDC) operators, including limited access to dollars, unfavorable exchange rates, and uncertainties in the business environment. These challenges have eroded confidence in the market’s supply framework, spurring currency substitution and speculative activities, which have worsened the naira’s current slide.
Gwadabe also called on the central bank and fiscal authorities to intervene more effectively by refining their strategies in the retail end of the market through BDCs. He urged the approval for the importation of dollar cash by licensed operators and suggested a more transparent mechanism for bank dollar sales to BDCs. Additionally, he stressed the need for the federal government and state agencies to address inflation, maintain fiscal discipline, and focus on poverty alleviation for sustained economic growth.
Meanwhile, at the official FX market, the naira also showed signs of pressure, depreciating slightly to N1,500.80 against the dollar, a 0.6% drop. The Central Bank of Nigeria (CBN) recorded a similar trend, with the naira falling to N1,505 per dollar on Wednesday, compared to N1,502 on Tuesday. Some traders noted an increase in demand for dollars, although they could not pinpoint the exact cause of the pressure in the market.
This currency volatility highlights the broader economic challenges facing Nigeria, including inflationary pressures, a growing fiscal deficit, and continued fluctuations in foreign exchange markets.
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