The Nigerian naira continued its steady recovery on Tuesday, appreciating to ₦1,560 per US dollar in the parallel (black) market, up from ₦1,565/$ recorded the previous day. The modest gain highlights ongoing efforts by the Central Bank of Nigeria (CBN) to stabilise the foreign exchange (forex) market amid economic reforms and tightening of currency flows.
However, in contrast, the naira weakened slightly in the official Nigerian Foreign Exchange Market (NFEM), depreciating to ₦1,530.5/$ from ₦1,529.5/$ recorded on Monday, according to updated data from the CBN. This represents a marginal loss of ₦1.
Despite the mixed performance, analysts noted a positive development: the exchange rate gap between the official and parallel markets narrowed, dropping from ₦35.5 to ₦29.5 per dollar. This indicates a slight convergence in rates, an objective the apex bank has been working toward since the forex market was unified last year.
The naira’s resilience in the parallel market reflects the impact of recent measures taken by the CBN to curb speculative trading, enhance forex inflow, and encourage transparency. Forex reforms introduced in 2024—particularly the unification of multiple exchange rates, revised Bureau de Change (BDC) licensing, and digital forex monitoring—are beginning to ease market volatility.
Foreign investors have also shown renewed interest in Nigeria’s capital markets following policy assurances by both the CBN and the Ministry of Finance. This, coupled with a moderate rise in diaspora remittances and export proceeds, has improved foreign currency supply at informal trading points.
While the appreciation in the parallel market brings short-term relief to traders and importers relying on unofficial channels, concerns remain over liquidity constraints in the NFEM. According to dealers, demand pressure still persists at the official window, particularly from manufacturers, airlines, and the petroleum downstream sector.
Speaking with Vanguard, a forex dealer in Lagos, Kabiru Sulaimon, said:
“We’re seeing more controls in the market. People are not rushing to buy anymore because the CBN is monitoring inflows more closely. There’s also better access to the Investors and Exporters (I&E) window for larger transactions.”
On the flip side, economic analysts have expressed concern over the sustainability of the gains. Dr. Bamidele Musa, an economist at the University of Lagos, warned that the naira’s continued strength in the informal market may not hold unless the CBN boosts supply in the official window.
“If the liquidity problem in the NFEM persists, it will continue to push demand back to the black market. What we need is a sustained forex inflow—whether from oil exports, FDI, or diaspora remittances,” he said.
For ordinary Nigerians, the strengthened parallel market rate means lower prices for imported goods—at least temporarily. Importers who rely on black market dollars for transactions may pass on reduced costs to consumers, especially in the electronics and textile sectors.
However, many still face the double burden of inflation and a weakening purchasing power. The National Bureau of Statistics (NBS) reported last month that inflation rose to 32.8%, driven largely by food prices and high energy costs. While currency gains can help moderate price increases, their impact depends on sustained exchange rate stability and broader economic reforms.
As the second half of 2025 unfolds, Nigeria’s currency trajectory will likely depend on key factors: crude oil revenue stability, sustained policy implementation by the CBN, and continued investor confidence. The Central Bank is expected to hold another Monetary Policy Committee (MPC) meeting later this month, where exchange rate management and inflation control are expected to dominate discussions.
For now, the naira’s appreciation on the streets offers a glimmer of hope for a more balanced forex market, but stakeholders remain cautious.