The nation’s currency faced fresh weakness on Thursday as it hit a new record low of N1,000 to the dollar on the parallel market. This significant drop came after the local currency closed at N858 to the U.S. dollar the previous day, but demand pressure and limited available dollars caused the naira to plummet further.

Traders on the Bureau de Change window expressed concerns as the pressure shifted from the official forex market to the autonomous market window. The naira briefly touched N1,000 against the dollar before

recovering to its previous level of N858 to the greenback, thanks to increased dollar inflow.

During the week, the Naira experienced a sharp decline of 21.21 percent, closing at N825 to the dollar on the parallel market. Economic insiders are worried about the currency’s stability, with independent petroleum marketers seeking more dollars for fuel imports contributing to the mounting pressure in the autonomous market.

Moreover, the Naira weakened against the dollar on the official window, driven by the mounting pressure from importers of fuel and other end-users. Despite the abolishment of multiple exchange rates in the country, the availability of dollars to end-users remains insufficient, leaving many manufacturing firms and importers heavily reliant on the autonomous window to fulfill their foreign exchange requirements.

The situation underscores the ongoing challenges in Nigeria’s forex market, with concerns over the stability of the local currency and its vulnerability to external pressures. Investors and traders are keeping a close watch on developments as the country navigates through these turbulent economic times.

Source: Blueprint