Naira weakens against dollar at official and black markets

DDM News

(DDM) — The Nigerian naira has resumed its downward slide against the United States dollar, closing Tuesday weaker at both the official and parallel foreign exchange markets.

According to official data released by the Central Bank of Nigeria (CBN), the naira closed at ₦1,533.10 per dollar, down from ₦1,531.95 recorded the previous day.

This represents a depreciation of ₦1.15 in the value of the naira at the Investors’ and Exporters’ (I&E) FX window.

DDM reports that the decline follows an earlier gain recorded at the start of the week, sparking renewed concern over the currency’s long-term stability.

In the parallel market, often referred to as the black market, the naira also suffered a setback.

It fell by ₦5 to trade at ₦1,565 per dollar, compared to ₦1,560 exchanged on Monday.

Currency dealers at major forex hubs in Lagos and Abuja attributed the pressure on the naira to increased demand for the greenback, especially among importers and business travellers.

They also cited a slow pace of dollar inflows from official channels and an unstable supply environment.

Meanwhile, the country’s external reserves have shown a marginal uptick.

According to the Central Bank’s latest figures, Nigeria’s foreign reserves stood at $39.54 billion as of August 1, 2025.

The modest increase in reserves had initially sparked optimism among investors and analysts, who anticipated temporary relief for the naira.

However, DDM gathered that the impact of the reserves was short-lived due to persistent structural issues in the foreign exchange market.

Traders say the central bank’s recent interventions have not been enough to stabilise supply and bridge the demand gap.

Despite several policy reforms introduced by the Bola Tinubu administration to unify exchange rates and reduce speculative activity, the parallel market continues to operate with a significant premium over the official rate.

Analysts warn that until confidence is fully restored, and dollar inflows increase substantially, the naira will remain under pressure.

The widening gap between the official and black market rates also raises the risk of arbitrage and further complicates efforts to streamline Nigeria’s forex system.

The ongoing volatility has affected pricing across sectors, especially for imported goods and services, with inflationary pressure likely to rise if the naira’s weakness persists.

Economists are calling for a more robust response from the CBN, including clearer communication strategies and policies to attract foreign portfolio investments.

As of Tuesday night, traders expressed caution in the market, with some halting transactions in anticipation of fresh directives from the apex bank.

While some stakeholders remain hopeful that external reserves will continue to rise, many agree that Nigeria needs structural reforms to increase export earnings and reduce dependence on imports.

The naira’s recent movements highlight the fragile nature of Nigeria’s monetary framework and the ongoing struggle to stabilise its currency amid complex macroeconomic challenges.

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