Naira dipped to its lowest official mark ever on Tuesday, briefly touching 1,248 against the dollar before clawing back some ground to close at 845, Reuters reported.
The record plunge in thin trading narrowed the gap between the official and unofficial parallel markets, where the currency trades freely and currently stands around 1,225 naira per dollar.
The dramatic swing reflects the ongoing struggle of the naira, caught between Governor Olayemi Cardoso’s pledge to let market forces guide exchange rates and the chronic dollar shortages plaguing the official market.
Cardoso’s comments, coupled with the scarcity of greenbacks, have pushed the official rate closer to the less-regulated parallel market, raising concerns about further volatility and capital flight.
The one-month non-deliverable forwards market offered a slightly brighter picture, with the naira quoted at 1,002.50. However, analysts remain cautious, citing the persistent gap between the official and unofficial rates as a sign of underlying pressure on the currency.
“The central bank’s commitment to market-driven rates is commendable, but it needs to be accompanied by measures to boost dollar supply and address underlying structural issues,” a Lagos-based currency trader told Reuters.
“Until then, expect the naira to remain unpredictable and vulnerable to further fluctuations.”
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