The naira weakened further in the parallel market on Wednesday, sliding to N1,478 per dollar as pressure persisted on the local currency. The decline came even as the naira recorded a marginal gain at the official Nigerian Foreign Exchange Market.
At the street level, traders quoted the naira at N1,478 per dollar, down from N1,475 recorded on Tuesday. The movement reflected sustained demand for foreign currency outside the official window, where access remains tight for many businesses and individuals.
In contrast, data released by the Central Bank of Nigeria showed a slight appreciation at the official market. The naira strengthened to N1,451 per dollar at the NFEM, improving by N1 from the previous day’s closing rate of N1,452 per dollar.
The opposing movements widened the gap between the official and parallel markets. The spread increased to N27 per dollar, up from N23 recorded a day earlier, highlighting continued distortions in the foreign exchange market despite ongoing reforms.
Market analysts say the divergence reflects lingering supply constraints and speculative demand in the parallel market. While the CBN-managed window has seen relative stability in recent weeks, the informal market continues to react sharply to dollar scarcity and expectations around policy direction.
Traders attributed the naira’s weakness on the streets to strong demand for dollars to meet import obligations, school fees, medical bills and year-end travel expenses. Some dealers also cited cautious sentiment among investors and exporters, who are reportedly holding back dollar inflows amid uncertainty.
The CBN has maintained that its exchange rate reforms are aimed at achieving a more transparent, market-driven system. Officials say gradual improvements at the official window reflect better price discovery and increased participation by authorised dealers.
However, the widening premium between both markets remains a concern for businesses, as it complicates pricing decisions and raises the cost of imports. Economists warn that sustained gaps could fuel arbitrage and undermine confidence if not addressed through improved liquidity and consistent policy signals.
For now, the naira’s mixed performance underscores the fragile balance in Nigeria’s foreign exchange market, where modest official gains continue to compete with persistent pressures on the streets.
