See Exchange Rate Tonight As Naira Weakens Further Against Dollar

A widening gap between the official and parallel market exchange rates of the Nigerian currency naira indicates the government’s lack of capacity to stabilize the currency and the likelihood it may depreciate further.

The naira was quoted at 1002 per dollar at the parallel market, according to Umar Salisu, a foreign exchange operator who compiles the data in Lagos.

But it was 26% stronger at 745.19 naira/dollar in the official window, according to FMDQ, a Lagos-based platform where the currency is traded.

See Exchange Rate Tonight As Naira Weakens Further Against Dollar

The naira has weakened sharply in street trading in the last two weeks as the central bank abstained from increasing supply of the greenback at the official window, where the currency rate has been very volatile.

Naira non-deliverable contracts for three months time traded at a record 821.38 per dollar on Wednesday.

The devaluation and currency reforms briefly merged the official and parallel market rates before the spread started widening again in August, pressured by inadequate official dollar supply, according to Fitch Ratings.

Recall that before Nigeria initiated its currency reforms, the gap between the official and parallel market rate was as high as 70%.

BY IYABO AINA

Publisher Of News Rain Nigeria