Naira bows to demand pressure hits N1,000 against dollar at parallel market

By Amaka Ifeakandu, Lagos, with agency report

The nation’s currency on Thursday hit a new record low, reaching the N1,000 to the dollar as the local currency faced fresh weakness on the parallel market.

The local currency had closed at the parallel market at N858 to the U.S. dollar on Wednesday, but traders on the Bureau de Change window said demand pressure mounted on few available dollars on the market, pushing the naira to a new low.The pressure has shifted from the official forex market to the autonomous market window, leading to concerns among traders and investors.

The naira touched N1,000 briefly on the parallel market before strengthening back to Wednesday’s closing level of N858 to the greenback, according to one of the operators who said that initial demand pressure forced the depreciation but more dollar inflow led to a retreat.Closing at N825 to the dollar on the parallel market on Monday, the Naira experienced a significant decline of 21.21 percent from week to date.The sudden drop has raised concerns among economic insiders about the currency’s stability.Insiders attributed the mounting pressure on the Naira in the autonomous market to the increased number of independent petroleum marketers seeking dollars for fuel imports.

This surge in demand for foreign exchange has put additional strain on the already struggling local currency.

The Naira also weakened against the dollar on the official window on Wednesday, as pressure on the local currency from importers of fuel and other endusers mount.

At the I&E FX market, Naira depreciated as the dollar was quoted at N793.70 as against the previous close of N742.93 its closed the previous day, according to results from the FMDQ platform.However, currency dealers pointed out that despite the abolishment of multiple exchange rates in the country, the availability of dollars to end users remains insufficient.

Many manufacturing firms and importers still heavily rely on the autonomous window to fulfill their foreign exchange requirements, underscoring the ongoing challenges in Nigeria’s forex market.