The Nigerian naira further depreciated on Wednesday due to ongoing liquidity challenges in the foreign exchange market. The currency weakened in both official and parallel markets as demand pressures intensified, despite intervention efforts by the Central Bank of Nigeria (CBN).
According to spot FX statistics, the naira closed at N1,538.67 per dollar after depreciating by N2.53 versus the US dollar in the official market. According to AIICO Capital Limited, the currency depreciated by 16 basis points despite the CBN’s efforts to stabilise the market by selling $59.7 million to authorised dealer banks in the N1,532–N1,540 range. The USD/NGN pair moved between N1,532 and N1,550 during the trading session before levelling off at N1,538.68.
Nigeria’s debt servicing requirements and increased dollar demand from international investors were the main causes of the depreciation. Due to a relative lack of foreign cash, the naira fell by N5 on the parallel market, closing at N1,580 per dollar. Concerns over speculative activity and the CBN’s capacity to control market volatility were raised by the growing discrepancy between the official and parallel market rates, which rose from 2.53% to 2.69%.
