FX: Naira Depreciates To N1,610/$1 At Parallel Market

The Naira experienced a setback on Monday, slipping to N1,610 against the Dollar in the parallel section of the foreign exchange (FX) market.

This marks a 0.63 percent decline from the N1,600/$ recorded just a few days ago on March 15.

“Bureau de change operators in Lagos are observing this fluctuation closely,” shared one operator speaking to TheCable. “We’re currently buying a dollar at N1,580 and selling at N1,610/$, with a profit margin of N30.”

In contrast, the official FX market saw the Naira strengthen on March 18, gaining 1.86 percent to trade at N1,572.86 compared to N1,602.75/$ on March 15.

There’s an air of cautious optimism in the FX market as projections hint at a potential appreciation for the Naira shortly, attributed to reforms under President Bola Tinubu’s administration. Goldman Sachs, a prominent financial institution, shared their forecast on March 10, suggesting that the Naira could appreciate N1,200 against the Dollar within the next 12 months.

“We think the Naira looks cheap on a REER basis in a historical context,” stated Goldman Sachs. “We thus see reason for the Naira to be undervalued, and we see it appreciating to 1200 within the next 12 months.”

Echoing this sentiment, Bismarck Rewane, CEO of Financial Derivatives, previously noted in December 2023 that Nigeria’s exchange rate is expected to appreciate as inflation drops.

These forecasts provide a glimmer of hope for stability and growth in the FX market, potentially offering relief to businesses and individuals navigating currency fluctuations.

The movement of the Naira against the Dollar remains a pivotal aspect of Nigeria’s economic landscape, impacting various sectors from imports and exports to inflation rates and investor confidence. As stakeholders monitor these developments closely, the prospect of a stronger Naira offers a ray of optimism amidst the ever-changing FX dynamics.

Emmanuel Ochayi