Naira drops to N570/$1 on high forex demand

The naira has weakened against the dollar at the parallel market, trading at N570 amid demand for the currency during the yuletide season.

This is a drop of N5 or 0.9 per cent from the N565 it traded last week.
Street traders across forex markets in Lagos quoted the rate at N570 to a dollar on Thursday.
The parallel market (street market) is characterised by noncompliant behaviour with an institutional set of rules.
The Central Bank of Nigeria (CBN) has consistently maintained that the parallel market represented less than one percent of foreign exchange (FX) transactions and should never be used to determine Nigeria’s naira/dollar exchange rate.
At the official market, the currency appreciated by 0.06 percent to open at N413.79 against N415/ a dollar on Wednesday, according to details on FMDQ OTC Securities Exchange, a platform that oversees official foreign-exchange trading in Nigeria.
Traders said the naira could come under pressure next week on the unofficial market where it trades more freely as outbound travel and businesses resume, according to a report by Reuters.
“I expect a bit of demand next week, which could push naira down,” Reuters quoted a trader as saying.
Nigeria is battling dollar shortages as a result of low oil prices caused by the COVID-19 pandemic.