- Traders blame Naira’s fall on contractor payments, dollar diversion, weak supply, and inflation.
- Parallel market rate slipped to N1,560/$1 in mid-August, widening the gap with the official window.
- Speculation and hoarding fuel volatility, though CBN inflows and reserves offer some support.
Currency traders have linked the recent depreciation of the naira at the parallel market to the supply challenges in the foreign exchange market and the huge demand for forex as a result of payments to contractors by the Federal Government agencies.
They also cited diversion of forex, especially from diaspora remittances, as one of the major causes of distortion in the foreign exchange market.
This is coming after the strong performance of the naira in the month of July, with the local currency trading at around N1,530/$1 at some point at the parallel market, as against the N1,580/$1 it started the month with.
