Nigeria's official market experienced a notable decline as the national currency, the naira, hit a record low against the dollar, dropping to N1,248 during mid-day trading.

On Tuesday, Nigeria's official market experienced a substantial downturn as the national currency, the naira, reached a record low against the dollar.

Thin trading conditions worsened the situation, causing sharp fluctuations similar to those observed in the unofficial parallel market, where the currency trades with greater flexibility.

LSEG data indicated that the naira plunged to as low as N1,248 against the dollar during mid-day trading, marking a significant drop from its opening rate of N927 earlier in the day.

Following the downturn, the currency exhibited some resilience, recovering to N845 later in the trading session. Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), has recently expressed the intention to allow market forces to have a determining role in setting exchange rates.

Emphasizing the importance of transparent and well-defined regulations governing market operations, Governor Olayemi Cardoso signaled the intention to ensure clarity and fairness in the financial markets.

Governor Olayemi Cardoso's remarks, combined with ongoing dollar shortages in the official market, played a role in the gradual convergence of the naira's official exchange rate toward levels observed in the parallel market.

On Tuesday, the currency was quoted at around N1,225 on the parallel market. In contrast, the one-month non-deliverable forwards market quoted it at N1,002.50, highlighting the complex dynamics and diverse valuations across different trading platforms, as reported by Reuters.