The naira continued its downward slide within the parallel market on Thursday, exchanging at N1,621/$1, a depreciation from N1,580/$1 recorded only a day earlier on Wednesday.
Checks by Nairametrics on the Wuse Zone 4, Abuja confirmed the value motion as merchants cited rising demand pressures amid restricted greenback provide.
This represents a N41 decline in 24 hours, deepening considerations amongst merchants and {economic} watchers about sustained volatility within the FX market.
Whereas the official trade price stood at N1,644.00/$1 on Wednesday, in keeping with figures revealed on the Central {Bank} of Nigeria (CBN) web site, there was no up to date official price revealed by the CBN a number of hours after market shut on Thursday.
Market individuals at Wuse Zone 4 in Abuja attributed the persistent depreciation to a resurgence in speculative actions, unmet demand from importers, and lingering confidence points within the overseas trade market.
Market gamers, consultants blame Trump
Alhaji Aminu Gwadabe, President of the Affiliation of Bureau De Change Operators of Nigeria (ABCON), attributed the continued volatility within the foreign exchange market to a mixture of native and international uncertainties. In a message despatched to Nairametrics, he acknowledged:
“The volatility, fears, happenings, and shocks in each the native and worldwide markets known as for disdain. President Trump’s tariff bulletins have despatched markets into panic, lack of confidence, income losses, and price range evaluations.”
He added that regardless of ongoing interventions by the CBN, instability persists.
“As ordinary, the CBN, being a catalytic actor, should proceed to make sure stability by well timed interventions. Nonetheless, volatility stays a problem and must be extra comprehensively addressed,” Gwadabe stated.
He additional known as for an expanded coverage transmission mechanism to raised serve the retail finish of the FX market.
“It’s subsequently vital for the CBN to reevaluate the efficacy of that Coverage transmission mechanisms and broaden its to scope to the BDCs retail section of the market to cater for the wants of the essential retail wants of invisible transactions the place the BDCs poses probably the most potent software of the CBN coverage transmission mechanism.”
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Non-public Enterprise (CPPE), additionally linked the naira’s current struggles to international developments and speculative pressures.
“This isn’t unconnected to current coverage alerts from President Trump and international oil worth actions. The market is closely information-driven, and speculative stress has spiked following the tariff bulletins,” Yusuf defined.
“Now that Trump seems to be having second ideas, we’d even see a little bit of a breather within the FX market,” he added.
In the meantime, merchants on the bottom say the scenario is being worsened by the uncertainty surrounding ongoing authorities reforms and inconsistent entry to official FX home windows.
“The demand right now was unusually excessive, particularly from small companies that may’t entry the banks. It’s placing stress on our provide,” a dealer at Abuja’s Wuse Zone 4, who requested to not be named, instructed Nairametrics.
The unfold between the official trade price of N1,644/$1 and the parallel market price of N1,621/$1 narrowed barely on Thursday, an indication that some convergence could also be happening, regardless of persistent volatility.
Market analysts warn that except the CBN resumes constant interventions or considerably boosts FX liquidity, the naira might proceed to face downward stress within the weeks forward
The continued slide of the naira, regardless of heightened CBN interventions, alerts persistent challenges in Nigeria’s FX liquidity and structural demand-supply mismatch.