La Naira, on Thursday, depreciated N1,538 per dollar in the parallel market on Friday, below N1,535/$ registered.
Similarly, in the Nigerian currency market (NFEM), the Naira fell to N1,503.5 per dollar of N1,503/$, which reflects a depreciation of 50 Kobo.
The margin between the parallel market and the NFEM rate stood at N32/$, without changes since Thursday.
Also read: Naira Gains, Operations N1,506.08/$ in the official market
However, in the parallel market, the local currency lost N3 after opening the week at N1,530/$.
Nigeria’s economy, which depends largely on crude oil exports for currency gains, is susceptible to global fluctuations of the price of oil.
A decrease in oil prices or a fall in production can significantly reduce foreign currency inputs in the country.
The high demand for foreign currency, driven by the need to import raw materials and finished products, as well as services such as international school rates and medical tourism, further aggravate the problem.
The Central Bank of Nigeria has implemented various policies to administer these challenges, including the departure of a dual change rate system in an attempt to unify official and parallel markets.
Despite these reforms, the parallel market continues to thrive due to the persistent shortage of dollars in the official market.
The decision of the current administration of floating the Naira has been an important factor in the recent volatility.
This policy, Tribune online gathered, aimed at allowing market forces to determine the value of the currency, has led to significant depreciation.
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