The Nigerian naira recorded mixed performances across different segments of the foreign exchange market on Wednesday, highlighting ongoing volatility in the currency market despite recent policy interventions by the Central Bank of Nigeria (CBN).
At the parallel market, also known as the black market, the naira depreciated slightly, falling to ₦1,620 per dollar from ₦1,618 per dollar on Tuesday, continuing a pattern of mild daily fluctuations that has characterized this segment of the market in recent weeks.
Conversely, the naira appreciated in the Nigerian Foreign Exchange Market (NFEM), gaining ₦5 to close at ₦1,599 per dollar, compared to ₦1,604 per dollar on Tuesday.
This was revealed in data published by the Central Bank of Nigeria, which indicated a strengthening of the naira at the official window — a development seen by some analysts as a positive response to tightening monetary measures and improved forex inflows.
The dual movement in the exchange rates widened the gap between the official and parallel market rates to ₦21 per dollar, up from ₦14 on Tuesday. The growing disparity has raised concerns among economists about arbitrage opportunities and the sustainability of current exchange rate policies.
Market analysts attribute the naira’s appreciation at the NFEM to a combination of increased dollar supply and the CBN’s continued interventions aimed at stabilizing the forex market.
In recent months, the apex bank has adopted a range of policy measures, including clearing forex backlogs, tightening monetary policy, and enhancing transparency in the forex market through the reintroduction of the Order-Based Two-Way Quote System.
Speaking on the development, FX trader Sani Idris noted, “The improvement in the official rate suggests that the central bank is managing to attract more forex supply into the formal channels. However, the persistent pressure at the parallel market reflects the ongoing imbalance between supply and demand for dollars.”
The widening exchange rate gap also underscores the challenge facing the CBN in achieving convergence between the official and parallel markets — a goal the bank has repeatedly emphasized in its public statements.
“There needs to be a more coordinated approach to unify the rates and reduce the incentives for round-tripping,” said Ngozi Okeke, a Lagos-based economist. “While progress is being made at the official level, the shadow market remains active and influential.”
Meanwhile, businesses and importers continue to bear the brunt of forex volatility, with many forced to source dollars at higher rates in the parallel market due to limited access to official allocations.
As the CBN moves to implement further reforms and boost dollar inflows, market watchers will be closely monitoring future movements in the naira’s value across all forex windows.
Despite the gains at the NFEM, the continued depreciation at the parallel market serves as a reminder of the deep-rooted structural issues in Nigeria’s foreign exchange landscape, which require sustained policy action and market confidence to resolve.
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