Emmanuel OchayiThe Naira took a slight dip on Wednesday, closing at N1,421/$ at the Nigerian Autonomous Foreign Exchange Market (NAFEM).
This marks a 1.27 percent drop from the previous day’s rate of N1,403/$, as reported by FMDQ Securities.
According to data, the dollar supply saw a 2.5 percent increase, reaching $164 million, up from $160.77 million on Tuesday.
During the day’s trading, the intraday high remained steady at N1,440/$, while the intraday low closed stronger at N1,335. This reflects a slight fluctuation compared to the previous day’s rates.
Similarly, at the parallel market, also known as the black market, the Naira weakened by 0.34 percent to N1,450/$, down from N1,445/$ the day before, as confirmed by traders.
Commenting on the market dynamics, analysts at Coronation Registrars Limited highlighted the persistence of uncleared backlogs from businesses and investors, contributing to the FX market’s instability.
READ ALSO: EFCC Arrests BDC Operators As Naira trades For 1,416/$1
“The backlog of FX demand from investors and businesses may still be an issue. Although an audit designated some US$2.4bn of these demands as not legitimate, that does not remove the demand itself. And, it will likely take months to clear all the various backlogs. So, we expect the FX market to be unsettled for a while, but with the potential to stabilize considerably later in the year,” they stated.
While last week saw a convergence between the official and street markets, analysts cautioned against interpreting it as a liberalization of the FX market. They anticipate a potential widening gap between both markets in the coming days.
However, the Naira’s performance against the dollar underscores ongoing challenges in the FX market, with analysts urging patience amid efforts to address backlogs and stabilize the exchange rate.
