At the commencement of this week’s trading, Nigeria’s naira was valued at approximately ₦1,362.55 per US dollar in the official foreign exchange market. Meanwhile, the parallel market showcased a slightly higher rate, with the dollar fetching around ₦1,425 on Monday.
This official rate is disseminated via the Central Bank of Nigeria’s exchange platform, serving as the standard reference for all transactions processed through the nation’s formal foreign exchange channels.
Despite fluctuations in global economic conditions, the naira started the week on a comparatively steady note. Market participants are closely watching factors such as foreign exchange liquidity, dollar demand, and interventions from the Central Bank of Nigeria.
Naira-dollar exchange rate
In the bustling parallel market, often dubbed the black market, currency traders in Lagos and other key trading hubs offered the dollar at about ₦1,425 for selling and ₦1,410 for buying.
Analyzing the discrepancy between the NFEM’s official rate of ₦1,362.55 and the parallel market’s selling rate of ₦1,425 reveals a gap of roughly ₦62.45 per dollar.
The spread remains broadly in line with recent trading sessions, indicating that the naira has maintained relative stability across the two markets.
The CBN explains that the Nigerian Foreign Exchange Market rate is determined using the volume-weighted average of transactions completed during each trading session.
Recent market data also showed the official exchange rate moving within a relatively narrow range of around ₦1,362 to ₦1,364 per dollar.
Market outlook
Market watchers have attributed the recent stability partly to improved foreign exchange liquidity and efforts by the Central Bank to manage demand pressures in the official market.
Reuters also reported that the naira had recently traded around the ₦1,360 level in the official market, while street-market rates remained close to ₦1,425 per dollar.
Dealers are expected to continue monitoring dollar supply and demand as the new trading week progresses.
For individuals and businesses looking to buy or sell dollars, the actual rate offered may differ depending on the bank, bureau de change, transaction size, payment method and location.
The NFEM rate applies to transactions conducted through authorised dealers within the formal foreign exchange market.
The parallel market rate, meanwhile, reflects cash transactions conducted outside the official foreign exchange window.