The Nigerian naira appreciated against the U.S. dollar in the parallel market on Friday, closing at N1,610/$1, compared to N1,630/$1 recorded on Thursday.
This represents a N20 increase within a day.
Similarly, the British pound weakened slightly against the naira, trading at N2,000/£1 on Friday, down from N2,010/£1 the previous day—a 0.50% decline.
The euro also saw a drop, closing at N1,655/€1, marking a 0.91% appreciation of the naira against the European currency.
The latest movement in the parallel market comes as the Central Bank of Nigeria (CBN) reported an official exchange rate of N1,493/$1 as of Thursday.
On Friday, the CBN’s rates indicated that the naira is trading at N1,507.40/$1 (buying rate) and N1,508.40/$1 (selling rate).
The improvement in the parallel market rate suggests increased dollar supply or reduced speculative pressure on the local currency.
Outlook
While the naira’s modest gain in the parallel market is a positive sign, analysts caution that fluctuations remain likely due to external factors such as oil prices, remittance inflows, and investor sentiment toward Nigeria’s economy.
The foreign exchange market continues to experience volatility, and further interventions from the apex bank may be necessary to ensure sustained stability.
More insights
The CBN has been implementing several forex interventions and policy measures aimed at stabilizing the naira, including tightening regulations on Bureau De Change operators and increasing dollar liquidity in the official market.
- Earlier this week, CBN Governor Olayemi Cardoso announced that any violation of the newly launched Nigeria Foreign Exchange (FX) Code would attract severe penalties.
- He affirmed the Central Bank’s resolve to enforce ethical conduct and transparency in the foreign exchange market.
- Analysts say the FX Code is a landmark initiative by the CBN which establishes clear and enforceable standards for ethical behaviour, governance, and compliance in Nigeria’s foreign exchange market.
“The FX Code marks a new era of compliance and accountability. It is not just a set of recommendations; this is an enforceable framework. Under CBN Act 2007 and BOFIA Act 2020, violations will be met with penalties and administrative actions,” Cardoso said.
According to the CBN, Nigeria’s foreign exchange reserves declined significantly in two weeks this January 2025, falling by $832.62 million between January 6 and January 21.
In April 2024, Nairametrics reported that Nigeria’s foreign exchange (FX) reserves have witnessed a significant downturn, plunging by approximately $2.16 billion in 29 days, amidst the Central Bank of Nigeria’s (CBN) robust efforts to stabilise the naira.
