Naira drops 0.2% to trade N578/$1 at parallel market

The naira, on Wednesday, depreciated further against the dollar at the parallel section of the foreign exchange market.

Bureaux De Change operators (BDCs), popularly known as ‘abokis’, who spoke to TheCable in Lagos, quoted the naira at N578 to the dollar at the street market.

The figure is N1 or 0.2 percent lower than the N577 it traded two weeks ago.

The street traders put the buying price of the dollar at N574 and the selling price at N578, leaving a N4 profit margin.

A parallel market (street market) is characterised by noncompliant behaviour with an institutional set of rules.

The Central Bank of Nigeria (CBN) has often maintained that the parallel market is not the true reflection of the naira.

On the official market side, the local currency closed flat against the dollar on Tuesday at N416.67, according to information obtained from FMDQ OTC Securities Exchange — a platform that oversees official foreign-exchange trading.

Analysts have predicted that the naira may depreciate in the coming days due to ongoing conflict between Russia and Ukraine.

They said that while the CBN may have enough supply to support the forex market over the short term, declining foreign inflows and weakening of the external reserves could force further currency depreciation in the medium to long term.