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he Nigerian financial landscape witnessed a fresh downturn in the value of the naira across both official and parallel foreign exchange markets on Friday.

At the parallel market, the national currency depreciated to N1,670/$ from N1,600/$, while it closed at an official rate of N1,537/$, down from N1,498/$ recorded the previous day.

This decline has widened the gap between the official and parallel market rates to N133, sparking renewed concerns about round-tripping activities.

Despite a surge in dollar supply amounting to a total transaction volume of $3.83bn in eleven days of trading activities through the Nigerian Autonomous Foreign Exchange Market (NAFEM) by Deposit Money Banks, the naira continues to face downward pressure.

According to data from FMDQ Securities Exchange, commercial banks, the Central Bank of Nigeria (CBN), and international oil firms were the major sellers of forex at NAFEM.

The increased liquidity at NAFEM followed a directive by the CBN, urging banks to sell their excess dollar stock and enhance liquidity in the FX market. However, challenges persist despite these efforts.

The widening gap between official and parallel market rates raises concerns about the resurgence of round-tripping activities. In response, banking institutions and International Money Transfer Operators (IMTOs) are preparing to implement operational adjustments to accommodate the revised remittance framework issued by the CBN.

While the CBN’s interventions aim to boost forex supply and stabilize the market, the naira’s depreciation persists, driven by strong demand for dollars by speculators and individuals traveling for various purposes.

Currency traders in Abuja reported a consistent increase in demand for the dollar, leading to fluctuations in exchange rates in the parallel market. Concerns are mounting among Bureau De Change operators as the naira approaches N1,700/$.

Amidst these challenges, Dele Oye, the National President of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), called on the government to intensify efforts to address the twin economic challenges of naira devaluation and inflationary pressure.

Oye emphasized the importance of a stable currency in making agricultural inputs more affordable and bolstering consumer purchasing power. He urged the government to implement robust economic policies aimed at stabilizing the naira and facilitating access to finance for farmers.

Additionally, Oye commended recent initiatives aimed at boosting local food production and achieving food security in Nigeria. However, he stressed the need to address the depreciating value of the naira, which exerts inflationary pressure on input costs and affects overall food prices.

As Nigeria grapples with inflationary pressures and exchange rate volatility, stakeholders emphasize the urgency of implementing measures to stabilize the economy and support local producers.