Naira dipped significantly against the US Dollar at $1/N420 in the parallel market, indicating N5 (1.3 per cent) loss compared to $1/N375 recorded on Thursday.

The severe pressure on Nigeria’s foreign exchange market has led to significant depreciation of the Naira across all the market segments, with JP Morgan predicting a further depreciation of the Naira before June.

The currency also lost against Pounds Sterling as it currently costs ₤1/N470 for sellers and ₤1/N485 for customers buying. The US dollar is bought at the parallel market at $1/N365 and sells for an average of $1/N380 while Euro is bought for €1/N405 and sold for €1/N412.

Recall that the Naira had depreciated by N9 against the dollar in the parallel market on Wednesday, its biggest daily fall against the dollar since 2017, as the exchange rate rose sharply from N366 to N375 per dollar as at Wednesday.

At the Investors & Exporters (I&E) window, the exchange rate lost N1.58 as it rose to N368.33 per dollar from N366.75 per dollar. This is also the biggest daily depreciation that the window has witnessed since 2017 when it was introduced.

The massive crash in crude oil price and the constant pressure on the country’s foreign reserve due to the Central Bank of Nigeria’s sustained intervention in the market is having negative effect on the value of the Naira.

Market operators believe that this development is due to increased demand for the dollar as many traders are forecasting foreign exchange scarcity due to crash in crude oil price. This will cause a huge decline in the country’s foreign exchange inflow coupled with constant reduction in the external reserve.