The Naira slumped against the United States dollar at the parallel market to trade at N570 as demand for the currency surged during the Christmas season.
The current parallel market exchange rate marks a N5 or 0.9 percent decline from the N565 it traded the previous week.
As of Thursday, street traders across forex markets in Lagos quoted the rate at N570 to the green back.
A parallel market (street market) is characterised by noncompliant behaviour with an institutional set of rules.
According to the Central Bank of Nigeria (CBN) the parallel market marks below one percent of foreign exchange (FX) transactions and should never be used as a determinant of Nigeria’s naira/dollar exchange rate.
At the official market, the Naira rose by 0.06 percent to open at N413.79 against N415/ a dollar on Wednesday, this is according to details on FMDQ OTC Securities Exchange, a platform that oversees official foreign-exchange trading in Nigeria.
Traders speculated that the naira could face pressure in the coming week on the unofficial market where it trades more freely as outbound travel and businesses resume, according to a report by Reuters.
“I expect a bit of demand next week, which could push naira down,” Reuters quoted a trader as saying.
Nigeria is challenged with dollar shortages due to low oil prices caused by the COVID-19 pandemic.
