The Naira on Monday experienced a slight appreciation in the parallel market, rising to N1,730 per dollar, up from N1,740 per dollar over the weekend.
However, the Naira depreciated in the Nigerian Autonomous Foreign Exchange Market where its value fell to N1,681.42 per dollar, from N1,678.87 per dollar recorded last Friday.
This represents a drop of N2.55, highlighting a weaker position for the domestic currency in the NAFEM segment.
Data from the FMDQ also revealed that the gap between the parallel market rate and the NAFEM rate narrowed significantly, decreasing to N48.58 per dollar from the previous N61.13 last Friday, signaling a more aligned exchange rate between the two markets.
Looking ahead, analysts at Afrinvest West Africa Limited have projected a mixed performance for the Naira’s foreign exchange rate this week.
“The domestic currency had mixed trading performance last week. This week, we expect the Naira to trade within a similar band, though recent rate cuts in major economies have strengthened the case for carry trade opportunities in Emerging Markets and Developing Economies (EMDEs), especially those with relatively stable exchange rates,” they said.
With global economic developments, including rate cuts in major economies, the forecast suggests that there could be potential shifts in the exchange rate, making emerging markets like Nigeria attractive for carry trades, despite the challenges facing the Naira.
