The Nigerian naira has recorded its second consecutive depreciation against the US dollar in the official foreign exchange market, according to data released by the Central Bank of Nigeria on Wednesday.
The local currency weakened to N1,549.21 per dollar, representing a N3.94 drop from Tuesday's rate of N1,545.27. This decline is significantly higher than the N0.64 depreciation recorded the previous day, indicating an accelerating downward trend in the naira's value.
Contrasting Performance in Parallel Market
While the naira struggled in the official market, it showed signs of recovery in the parallel market, commonly known as the black market. The currency appreciated to N1,595 per dollar on Wednesday, improving from N1,600 recorded on Tuesday.
This divergent performance between the official and parallel markets suggests varying factors influencing exchange rates across different segments of Nigeria's foreign exchange ecosystem.
Recent Exchange Rate Fluctuations
The naira has experienced significant volatility in recent weeks. Prior to these consecutive depreciations, the currency had shown periods of appreciation against the dollar, particularly after a reported drop in inflation.
Financial analysts attribute these fluctuations to multiple factors, including Nigeria's foreign reserve levels, monetary policy adjustments, and global economic conditions affecting emerging markets.
The Central Bank of Nigeria continues to implement various measures aimed at stabilizing the foreign exchange market and reducing the gap between official and parallel market rates.
Meanwhile, in a separate development, the Federal Government, states, and local government councils shared N1.7 trillion as revenue increased in May, highlighting the complex interplay between government finances and currency stability.
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