By Sodiq Adelakun
The foreign exchange market (FX) kicked off the week with the Nigerian naira losing ground against the US dollar on the black market, also known as the parallel market.
This depreciation comes after the naira had appreciated for two consecutive trading days. On Monday, the dollar was exchanged for N1,130, indicating a 1.80 percent decline compared to the N1,110/$1 rate on Friday.
Interestingly, the Nigerian naira had shown some strength towards the end of last week, with a rise from N1,140 on Wednesday to N1,110 on Friday on the parallel market.
In a surprising turn of events at the Autonomous Foreign Exchange Market (NAFEM), the naira flexed its muscles and gained a remarkable 21.73 percent against the dollar.
On Friday, the dollar stood at N780.14, a significant improvement from the previous day’s rate of N996.75. Even though there was a decrease in the number of buyers and sellers offering dollars, this did not deter the naira from strengthening its position.
As a result, the total value of transactions, which reflects the daily FX market turnover, experienced a dip of 63.24 percent, settling at $84.02 million on Friday compared to the previous day’s $228.54 million.
The naira’s resilience in the face of dwindling dollar supply showcases its unwavering determination to hold its ground.
This unexpected surge in value has left market observers in awe, highlighting the unpredictable nature of the foreign exchange market.