Naira has dropped to N585 against the dollar at the parallel section of the foreign exchange market.

The figure represents N4 or 0.7 percent depreciation compared to the N581 it traded last week.

Bureaux De Change operators (BDCs), popularly known as ‘abokis’, who spoke to our correspondent in Lagos on Wednesday, said the naira exchanges for N585 to the dollar while they purchase at N578/$1, leaving a gain of N7.

A parallel market (street market) is characterised by noncompliant behaviour with an institutional set of rules.

Since the suspension of trading information by abokiFX — citizens have resorted to street traders for current parallel market rates of the local currency.

However, Central Bank of Nigeria (CBN) has consistently maintained that the parallel market represents less than one percent of foreign exchange (FX) transactions and should never be used to determine the naira/dollar exchange rate.

On the apex bank’s website, the naira closed at N416.42 to a dollar on the official market.

This implies that the official market rate has dropped N3 since January.

The Nigerian economy is expected to take a hit from the Russia-Ukraine crisis as an import-driven nation and a possible decline in diaspora remittances from Europe, especially the war zone. Since the crisis started on February 24, Nigeria’s foreign reserves have dropped by $138 million to $39.7 billion.

Next week, CBN’s policy-setting committee will meet to discuss monetary rates and the geopolitical concerns in Europe.

The Cable