Naira Weakens Amid Rising Dollar Demand; New Rate Revealed

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The Nigerian naira has weakened to N1,550 per dollar at the parallel market, driven by increasing demand pressure from retail end-users. The currency had opened the week at N1,498 per dollar, maintaining a relatively stable rate for weeks before the current decline. In contrast, the naira closed at N1,500 per dollar at the official market.

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Abudul Hassan, a Lagos-based Bureaux De Change (BDC) operator, attributed the naira’s decline to the migration of dollar demand pressure to the parallel market. “Everybody is moving to the parallel market, and we have seen rising pressure there. With little control from the regulator, speculators seem to be finding their way back to the market,” he said.

Bismarck Rewane, Managing Director of Financial Derivatives Company Limited, explained that the naira’s decline is a result of heightened forex demand compared to limited forex supply. “When a currency is misaligned from its fair value, certain adjustments are inevitable. Last year, the misalignment was as much as 43 percent, but this year, it is smaller, and the path to equilibrium will be less turbulent.”

Rewane urged calm, stating, “Therefore, there is no need to panic—keep your fingers and toes crossed.” His comments suggest that while the naira’s decline may be a cause for concern, it is not necessarily a reason to panic, and the market may eventually adjust to a more equilibrium state.

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