The exchange rate between the naira and the dollar has slid back to around N1,745/$1 on the parallel market, marking a sharp reversal from the sub-N1,600 levels seen at the end of last week. This depreciation follows a brief rally, as earlier reports from Nairametrics had quoted the exchange rate at around N1,685/$1, but the rates quickly worsened as business activities resumed.
As of 10 am on Wednesday, December 11, 2024, checks by Nairametrics indicated several rates above the N1,700/$1 mark, suggesting that last week’s gains may have been short-lived—referred to as a “dead cat bounce” in market terminology, indicating temporary price rises.
Peer-to-peer (P2P) exchanges were quoting rates as high as N1,715/$1, while International Money Transfer Operators (IMTOs) reported N1,745/$1. Popular stock trading apps like Bamboo and Trove listed the exchange rate at N1,730/$1 and N1,736/$1, respectively.
Meanwhile, the naira-dollar exchange rate in the official market closed at around N1,525/$1 on Tuesday, the strongest close since the introduction of the official Foreign Exchange Market (EFEM). This has led to a growing disparity of approximately N200 between the official and parallel market rates, raising concerns of a disconnect between the central bank-controlled official market and the parallel market where most retail transactions occur.
Some Bureau de Change (BDC) operators speculate that the recent weakening of the naira may be driven by speculators holding out despite the Central Bank of Nigeria’s (CBN) efforts to implement a more robust trading platform to stabilize the market.
