Nigeria Economic Jitters as Naira Depreciates to N1,500: Parallel Market Struggles Against Dollar

The Nigerian naira witnessed a 3.45 percent depreciation on Wednesday, plummeting to N1,500 against the dollar in the parallel market. This marks a decline from the N1,450 recorded just two days prior, leaving currency traders, also known as Bureau De Change operators, with a narrow profit margin of N10.

Meanwhile, at the official window, the naira showed a contrasting 1.05 percent appreciation to N1,418/$, adding complexity to the economic landscape. The FMDQ Exchange reported fluctuations, revealing a high of N1,510 and a low of N896.28, with a substantial daily turnover of $203.93 million.

Against this backdrop, the Central Bank of Nigeria (CBN) made significant moves on February 1, 2024, removing the limit on the foreign exchange rate quoted by international money transfer operators (IMTOs).

The CBN's directive calls for exchange rates to align with prevailing market rates, signaling ongoing reforms in the foreign exchange market. This shift sparks discussions on the broader economic implications and the necessity for strategic interventions to stabilize the naira.