The naira experienced mixed movements on Monday, recording a slight decline in the parallel market while gaining modestly in the official Nigerian Foreign Exchange Market.

The currency traded at N1,465 per dollar in the parallel market, a depreciation from the N1,456 per dollar recorded last Friday.

Conversely, it appreciated slightly in the NAFEM, trading at N1,437.5 per dollar, compared with N1,438.5 per dollar over the weekend.

This contrast underscores growing pressures in the parallel market alongside relative stability in the official market.

Data from the Central Bank of Nigeria confirmed the modest N1 appreciation in the official market, a reflection of the bank’s continued interventions aimed at managing exchange rates and ensuring foreign exchange availability for essential sectors, including the import of critical goods and services.

The widening gap between the parallel and official exchange rates is a source of concern for economists and traders alike.

The margin, which was N17.5 per dollar last Friday, has now expanded to N27.5 per dollar.

This widening difference indicat[es] persistent arbitrage opportunities and signal[s] potential challenges for businesses reliant on foreign exchange.

According to experts, the naira’s decline in the parallel market is a result of high demand for dollars from importers, travel-related needs, and speculative activities.

The modest appreciation in the official market, however, suggests that CBN interventions are still providing some buffer against sharp currency fluctuations.

Despite the relative stability in the official market, the overall market sentiment remains cautious, with traders and investors closely monitoring global oil prices, foreign investment inflows, and domestic policy measures, as these factors are crucial in determining the naira’s future path and the overall foreign exchange market’s stability.