The Nigerian naira experienced a modest appreciation in the parallel foreign exchange (FX) market, rising to ₦1,550 per United States dollar, up from the previous rate of around ₦1,570. This slight gain, though limited, has sparked cautious optimism among currency traders and financial analysts who have closely monitored the currency’s performance amidst lingering economic headwinds and forex scarcity.
Currency dealers in Lagos, Abuja, and Kano confirmed the uptick in value, attributing it to a recent decline in speculative demand and a marginal improvement in dollar supply within the informal market. The parallel market, often referred to as the “black market,” remains the go-to platform for many businesses and individuals unable to access foreign exchange through official channels.
According to bureau de change operators in Lagos, buying and selling rates hovered between ₦1,540 and ₦1,560 on Thursday, depending on volume and negotiation strength. Many believe the naira’s improved showing is due to market forces gradually realigning as short-term pressure eases.
An operator at the Allen Avenue forex hub in Ikeja, who gave his name as Abubakar, explained, “There’s less panic buying this week. Some importers who rushed to buy dollars earlier are now holding back. Also, there seems to be a small increase in dollar inflow, especially from Nigerians in the diaspora.”
Analysts suggest the marginal appreciation may also be linked to recent administrative measures by the Central Bank of Nigeria (CBN) to improve transparency and stability in the FX market. In recent months, the apex bank has embarked on a series of reforms, including unifying the exchange rate windows, clearing a backlog of matured FX obligations, and boosting remittance inflows through official channels.
While the official Investors and Exporters (I&E) window still reflects lower exchange rates—hovering around ₦1,500/$—the gap between the official and parallel market rates remains a concern. Market watchers believe narrowing this gap is critical to restoring investor confidence and improving dollar liquidity across the economy.
Dr. Ayodele Akinwunmi, a financial analyst at FSDH Capital, noted that although the naira’s gain is modest, it indicates a possible shift in sentiment among traders. “The stability or recovery of any currency doesn’t happen overnight,” he said. “This small upward movement suggests that some confidence is being restored in the short term, possibly as a result of supply interventions and reduced speculative pressure.”
He added that if sustained, the naira’s appreciation could help lower inflationary trends in the long run, given Nigeria’s high import dependency. “A stronger naira means reduced costs for imported goods and inputs, which should eventually ease pressure on consumer prices.”
However, other experts remain cautious about celebrating the gain too soon. They argue that the fundamentals of the economy still point to continued volatility unless structural issues are addressed. Among these are Nigeria’s heavy reliance on imports, low export diversification, and inconsistent dollar inflows from oil earnings due to production challenges and global price fluctuations.
Professor Uche Uwaleke, an economist at Nasarawa State University, said, “One day or one week of naira strength does not mean the problem is solved. We need sustained export earnings, capital inflows, and a stable macroeconomic environment to see real currency recovery.”
He urged the government to continue prioritizing policies that stimulate local production, improve balance of trade, and attract foreign direct investment. According to him, such efforts, rather than reactive monetary policies alone, will deliver sustainable foreign exchange stability.
Meanwhile, businesses that rely on imported inputs remain cautious in their outlook. Many are holding back on major purchases or restocking while waiting to see if the naira will stabilize further or resume its downward slide.
A representative of an electronics importer in Alaba International Market said, “We are watching the market. If the rate keeps improving and stabilizes below ₦1,500, we can start making bigger purchases again. But right now, it’s still uncertain.”
Similarly, manufacturers have called on the CBN to increase dollar allocation to the productive sectors of the economy, especially industries that generate jobs and value-added exports. The Manufacturers Association of Nigeria (MAN) in a recent statement urged the apex bank to fast-track forex access for companies to prevent further supply chain disruptions.
The slight gain in the naira has also been reflected in moderated prices of some imported commodities in urban markets. Traders report that items like imported rice, frozen poultry, and electronics have seen small price reductions in the past few days, although they stress that more stability is needed before consumers feel the real impact.
As the naira attempts to claw back value, all eyes remain on the central bank, government policy directions, global oil prices, and geopolitical developments that could influence capital flows and investor sentiment. For now, the modest gain to ₦1,550/$ in the parallel market provides a glimmer of hope, though tempered by the knowledge that more robust measures are still needed to ensure long-term currency stability and economic recovery.
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