After holding steady at N1,385 per dollar for the past month, the naira cooled in the parallel market, also known as the black market, on Tuesday despite Nigeria’s external reserves climbing to a 17-year high.
Data gathered from street traders in Lagos and online rate-tracking platforms showed that the naira depreciated by N15 to N1,400 per dollar on Tuesday, representing a 1.07 percent decline from N1,385, where it had traded for most of the past month.
At the Nigerian Foreign Exchange Market (NFEM), however, the local currency remained largely stable. The dollar was quoted at N1,362.84 on Monday, a marginal depreciation of 63 kobo from N1,362.21 recorded on Friday, according to data published by the Central Bank of Nigeria (CBN).
As a result, the gap between the official and parallel market exchange rates widened to N38 per dollar on Tuesday from N23 on Friday.
Trading activity at the NFEM strengthened significantly. Total turnover rose by 58.99 percent to $598.57 million on Monday from $376.48 million recorded on Friday, an increase of $222.09 million. However, the number of deals declined by 3.62 percent to 266 from 276 deals over the same period.
