Naira records mixed fortunes as parallel market weakens on festive demand

By Seun Ibiyemi

The Nigerian Naira recorded a mixed performance against the United States Dollar on Wednesday, recording marginal gains in the official window while depreciating in the parallel market due to sustained seasonal demand.

At the Nigerian Foreign Exchange Market (NFEM), the local currency strengthened slightly, trading between ₦1,449 and ₦1,452 to the dollar.

This appreciation was driven by improved liquidity and continued interventions by the Central Bank of Nigeria (CBN) aimed at clearing outstanding obligations and stabilising rates.

Conversely, the parallel market saw the Naira weaken, with the dollar exchanging at approximately ₦1,465 for buying and ₦1,475 for selling. Market operators attributed the decline to a surge in demand for foreign currency to fund travel and import-related transactions ahead of the festive season.

Financial analysts observed that the widening gap between the official and parallel market rates highlights persistent structural challenges, particularly the imbalance between limited dollar supply and robust private sector demand.

While the stability at the official window signals the effectiveness of recent regulatory measures, experts warn that pressures in the informal market are likely to persist in the near term without a significant improvement in foreign exchange inflows.