Naira weakens against dollar at parallel market

The Nigerian currency, Naira, Wednesday slid further in the parallel market, exchanging at N1,540 per US dollar compared to N1,525 recorded on Tuesday.

In contrast, the local currency showed modest strength at the Nigerian Foreign Exchange Market (NFEM), where it closed at N1,502.5 to the dollar, improving from N1,506.5 the previous day.

According to data released by the Central Bank of Nigeria (CBN), this represented a N6.5 gain for the Naira in the official window.

The divergence in rates widened the spread between the parallel market and the NFEM to N37.5 per dollar, up from N18.5 recorded on Tuesday.

Analysts say the growing gap underscores persistent pressure in the forex market, where demand continues to outweigh supply.

Currency traders in Lagos noted that dollar liquidity remains tight in the informal market, a factor contributing to the upward push on the exchange rate. Meanwhile, market watchers believe the official window’s appreciation could be linked to recent interventions by the CBN aimed at stabilizing the Naira and narrowing the arbitrage between both markets.

The parallel market, often referred to as the black market, has continued to attract individuals and businesses unable to access forex through official channels, making it a key driver of volatility in exchange rate trends.