Naira depreciates further across official and black markets

DDM News

The Nigerian naira recorded its highest depreciation against the United States dollar across official and parallel foreign exchange markets on Wednesday.

According to Diaspora digital media (DDM) reports, data from the Central Bank of Nigeria (CBN) showed that the naira weakened significantly in both forex markets.

The local currency traded at N1,500.8 per dollar on Wednesday, compared to N1,498.98 per dollar on Tuesday.

This represents a depreciation of N8.31 within a single trading day.

At the black market, the naira also depreciated against the dollar, continuing its downward trend.

The exchange rate at the parallel market fell to N1,525 per dollar on Wednesday, down from N1,515 per dollar on Tuesday.

Bureau de Change (BDC) operators confirmed the depreciation, attributing it to increased demand for foreign currency.

A forex dealer at Wuse Zone 4, Abuja, Alhassan Abubakar, disclosed that traders bought dollars at N1,515 per dollar.

He added that the selling price ranged between N1,520 and N1,525 per dollar on Wednesday.

The depreciation of the naira has now become the highest recorded in the past three days.

This downward trend has raised concerns among financial experts and business operators.

The depreciation of the naira comes amid a steady decline in Nigeria’s external reserves.

CBN data revealed that the country’s external reserves dropped to $34.34 billion as of March 4, 2025.

This figure represents a decline from $34.41 billion recorded on February 28, 2025.

The persistent depreciation of the naira has fueled worries over inflation and rising import costs.

Economic analysts believe the weakening of the naira results from forex shortages and speculative trading.

The black market continues to witness high dollar demand due to limited access to official foreign exchange channels.

The widening gap between the official and parallel market rates has deepened concerns over exchange rate stability.

Financial experts predict further depreciation if forex supply challenges persist.

The Central Bank of Nigeria has implemented several policies to curb excessive depreciation in recent months.

Despite these interventions, the naira continues to depreciate, raising questions about the effectiveness of current forex management strategies.

Market participants expect additional policy measures from the apex bank to stabilize the currency.

Importers and business owners are adjusting to fluctuating forex rates to manage rising costs.

The depreciation of the naira poses significant economic challenges, affecting both local and international transactions.

Policymakers are monitoring the situation closely to mitigate further depreciation.

The Central Bank may introduce new measures to strengthen the naira and ensure exchange rate stability.

Experts urge the government to implement structural economic reforms to address forex market inefficiencies.

The depreciation of the naira remains a key concerns as Nigeria navigates complex foreign exchange dynamics.

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