Naira depreciates across forex market segments after resumption from yuletide holiday

Naira weakened across various segments of the currency market on Tuesday as commercial activities resumed following a two-day holiday observed on Friday and Monday in celebration of Christmas.

The local currency changed hands at N470 to a United States dollar at the parallel market, N5 or 1.08% weaker than the N465 rate of exchange recorded at the close of business on Thursday, data from abokiFX.com, which collates rates from traders in Lagos, showed.

Similarly, naira shed value at the spot market also known as the Investors & Exporters (I&E) forex window as it closed at N393.50 to a dollar, according to the FMDQ Securities Exchange.

That showed a N1.50 or 0.38% decline from a close of N392 reported at the previous session.

Read also: Naira to depreciate further in January –CBN

The spread between the official exchange rate and that of the black market has now widened to N76.5 or 19.4%.

The perennial scarcity of dollar at the I&E window means those in need of the currency are forced to patronise the black market where dollar is costlier but more accessible, heaping pressure on the naira.

Forex turnover at the I&E window rose 31.2% to $129.19 million on Tuesday, relative to the $98.47 million recorded at the session before.

Naira hit an intraday high of N385 to a dollar and a low of N392.86 before closing at N393.50.

From the beginning of the year to 23rd December, Nigeria’s external reserves fell by 8.16% to $35.36 billion, weakening the central bank’s ability to defend the naira.

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