Market News
Naira gains on black market, narrows exchange rate gap
The naira appreciated against the dollar on Thursday in the parallel market, narrowing the exchange rate gap between the official and black market to N26.
Data from online platforms and street traders showed the naira strengthened to N1,575 per dollar in the parallel market, representing a gain of N35 or 2.2 percent compared to the N1,610 recorded at the beginning of June. It also marked a 0.6 percent appreciation from N1,585 traded since Tuesday.
At the Nigerian Foreign Exchange Market (NFEM), the naira has gained N32.32 since the start of the month. As of Wednesday, the official rate stood at N1,549.26 per dollar, compared to N1,581.58 quoted on June 2, 2025, reflecting a 2.08 percent appreciation, according to data from the Central Bank of Nigeria (CBN).
Last week, the Naira appreciated by N1.99 or 0.13 percent week-on-week against the US Dollar at the NAFEM, closing at N1,547.36 per dollar last week.
The gain was driven by continued inflows from foreign portfolio investors (FPIs), as well as contributions from exporters and non-bank corporates. These inflows helped push the Naira to a weekly high of N1,544.63 per dollar, according to analysts.
In contrast, the Naira weakened in the parallel market, losing 0.31 percent to close at N1,605 per dollar, thereby widening the gap between the official and parallel exchange rates.
Total FX inflows into the market during the week stood at $1.03 billion. FPIs accounted for the largest share of this, contributing 67.29 percent of total inflows for the fifth consecutive week, an indication of sustained foreign interest in Nigeria’s fixed income market. Non-bank corporates followed with 13.36 percent, exporters contributed 10.87 percent, while other sources accounted for 0.17 percent. Additionally, the CBN intervened with $86.6 million in FX supply to ease demand-side pressures.
Despite these inflows, Nigeria’s gross external reserves fell by $219.56 million or 0.58 percent week-on-week, closing at $37.71 billion as of the last update on Thursday.
“The naira is expected to trade within a narrow range, with a mild tendency to appreciate, assuming continued inflows from FPIs, exporters, and corporates. However, persistent demand pressures could limit the strength of any gains. Analysts are also closely monitoring the widening spread between the official and parallel market rates, which may point to a disconnect within the foreign exchange market,” analysts at Coronation Merchant Bank said.
