As of March 4, 2025, the Nigerian naira has experienced a depreciation in the parallel market, trading at approximately ₦1,510 per US dollar.
This decline follows a period of relative stability, where the naira had appreciated to ₦1,485 per dollar just a week prior, bolstered by improved dollar liquidity and supportive foreign exchange policies.
In the official Nigerian Foreign Exchange Market (NFEM), the naira appreciated slightly, closing at ₦1,499 per dollar, up from ₦1,500 the previous week.
This divergence between the official and parallel markets has widened the gap to ₦11 per dollar, compared to a ₦5 difference observed last week.
The recent depreciation in the parallel market is attributed to a combination of factors, including fluctuations in dollar supply and demand dynamics. Despite previous gains, the naira’s value remains susceptible to changes in foreign exchange liquidity and market sentiment.
To address these challenges and enhance transparency in the foreign exchange market, the Central Bank of Nigeria (CBN) has announced plans to automate foreign exchange trades starting December 2024. This initiative aims to replace the existing over-the-counter trading system, reduce market distortions, and curb speculative activities.
