FX rate gap in official, parallel markets widens by N175 as naira halts gains

The naira depreciated to N1,720 per dollar at the parallel section of the foreign exchange (FX) market on Wednesday.

The price signifies a decrease of 2.99 percent or N50 from the N1,670/$ traded in the street market on December 10.

Speaking to TheCable in Lagos, currency traders, known as bureau de change (BDC) operators, quoted the buying price of the greenback at N1,700 and the selling price at N1,720 — leaving a profit margin of N20.

So far, the naira depreciated consecutively in the second week of December.

Traders in the parallel market said the local currency commenced a depreciation streak from N1,600 on December 6 to N1,640 on December 9 — and further slipped to N1,670 on December 10.

The naira also recorded a weak performance against the greenback from December 9 to December 11 in the official window.

At the electronic foreign exchange matching system (EFEMS), a platform that oversees official FX trading in Nigeria, the local currency dropped by 1.31 percent to N1,545/$ on Wednesday — from N1,525/$ on December 10.

The local currency depreciated marginally from N1,535 on December 6 to N1,538 on December 9, before appreciating to N1,525 on December 10.

Consequently, the gap between the official window and the parallel market widened by N175 on Wednesday from N145 on December 10.

The Central Bank of Nigeria (CBN) had recently denied the sale of FX to eligible BDC operators at N1,301 per dollar.