The naira has depreciated further in the parallel market, trading at N1,550 per dollar, as demand for foreign exchange from retail end users surges.
The local currency had started the week at N1,498 per dollar and remained relatively stable in recent weeks before experiencing this decline. However, in the official market, the naira closed at N1,500 per dollar.
Abdul Hassan, a Lagos-based Bureau De Change (BDC) operator, attributed the pressure to increased demand in the parallel market.
“Everybody is moving to the parallel market, and we have seen rising pressure there. With little control from the regulator, speculators seem to be returning to the market,” he said.
Financial analyst and Managing Director of Financial Derivatives Company Limited, Bismarck Rewane, linked the naira’s depreciation to heightened forex demand outweighing available supply.
“When a currency is misaligned from its fair value, certain adjustments are inevitable. Last year, the misalignment was as much as 43 per cent, but this year, it is smaller, and the path to equilibrium will be less turbulent,” Rewane explained.
Despite the fluctuations, he urged market participants to remain calm, adding, “There is no need to panic—keep your fingers and toes crossed.”
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