Naira Gains Ground In Parallel Market, Trades At N1,560/$

The naira appreciated slightly in the parallel market on Tuesday, exchanging at N1,560 per dollar compared to N1,565 on Monday, signaling renewed strength for the local currency in informal trade circles. This five-naira gain comes amid ongoing interventions and policy measures aimed at narrowing the gap between official and unofficial exchange rates.

However, the Nigerian Foreign Exchange Market (NFEM) told a different story. Data published by the Central Bank of Nigeria (CBN) showed the naira depreciated marginally at the official window, closing at N1,530.5 per dollar. This marks a one-naira drop from N1,529.5 recorded the previous day.

As a result, the margin between the parallel market and NFEM rates has tightened. The gap, which stood at N35.5 per dollar on Monday, shrank to N29.5 per dollar by Tuesday, an encouraging sign for economic observers who have called for a more unified and transparent exchange rate system.

The appreciation in the black market may reflect improved dollar liquidity, possibly due to foreign inflows or speculative traders offloading hoarded dollars in anticipation of further naira stabilization. Meanwhile, the slight depreciation in the official market is seen as part of natural market adjustments within the managed float system introduced by the CBN.

This development comes against the backdrop of intensified monetary reforms, including periodic dollar interventions by the apex bank and efforts to boost non-oil export earnings to shore up Nigeria’s foreign reserves. While volatility still characterizes both forex segments, the narrowing of the spread is being viewed by analysts as a step in the right direction.

Still, many stakeholders caution that sustained naira recovery will require structural changes including reducing import dependency, curbing speculative trading, and fostering investor confidence. For now, the improved parallel market performance offers a glimmer of hope for businesses and consumers grappling with fluctuating exchange rates and inflationary pressures.