ABUJA, Nigeria — The Nigerian naira remained relatively stable against the United States dollar at both the official and parallel foreign exchange markets as trading commenced on Monday, with the gap between the two rates continuing to narrow amid ongoing monetary reforms.
Data released by the Central Bank of Nigeria (CBN) showed that the official Nigerian Foreign Exchange Market (NFEM) closed at ₦1,362.09 per dollar on Friday, July 24, the latest trading session available. During the session, the exchange rate traded within a range of ₦1,359.00 to ₦1,365.00 per dollar before settling at ₦1,361.00.
In the parallel market, commonly referred to as the black market, currency dealers quoted the US dollar at approximately ₦1,350 for buying and ₦1,375 for selling on Monday morning, reflecting only a modest difference from the official market rate.
The relatively narrow spread between the official and parallel market rates suggests continued convergence in Nigeria’s foreign exchange market, a significant improvement from the wide disparities witnessed in previous years. Analysts say the trend reflects increased liquidity and the impact of reforms introduced by the Central Bank to improve transparency and efficiency in the foreign exchange system.
The CBN has continued implementing measures aimed at stabilising the naira, attracting foreign investment and improving confidence in the country’s financial markets. These reforms include efforts to enhance liquidity in the official market and encourage a more market-driven exchange rate mechanism.
The stability in the exchange rate also follows last week’s decision by the Central Bank’s Monetary Policy Committee (MPC) to retain the Monetary Policy Rate (MPR) at 26.5 percent. The committee cited persistent global economic uncertainties, inflationary pressures and the need to sustain macroeconomic stability as reasons for maintaining the benchmark interest rate.
Financial experts say exchange rate stability is crucial for reducing inflationary pressures, lowering the cost of imports and improving business confidence. However, they also note that maintaining the gains will depend on continued foreign exchange inflows, prudent monetary policies and broader economic reforms.
Meanwhile, traders cautioned that exchange rates in the parallel market remain subject to fluctuations depending on demand, supply and location. Rates may vary among Bureau De Change operators and across different parts of the country due to transaction volumes and prevailing market conditions.
Market observers will continue to monitor developments in the foreign exchange market this week as investors assess the impact of recent monetary policy decisions and broader economic conditions on the value of the naira.
