The Naira gained value in the parallel market on Thursday, improving slightly to N1,730 per dollar from its previous rate of N1,725 per dollar the day before. Despite this small positive shift in the parallel market, Nigeria’s official exchange rate system, the Nigerian Autonomous Foreign Exchange Market (NAFEM), saw a contrasting trend, with the Naira weakening to N1,675.49 per dollar.
This shift in value on both fronts demonstrates the current volatility in the Nigerian currency market, where differences between the parallel and official rates are becoming more pronounced. According to FMDQ data, NAFEM recorded an indicative exchange rate rise to N1,675.49 per dollar on Thursday, up from N1,631.17 per dollar on Wednesday. This means the Naira depreciated by N44.32 in the official exchange rate, marking a significant shift.
Meanwhile, the volume of U.S. dollars traded in Nigeria’s official market—measured as the daily turnover—rose notably, increasing by 29% in just one day. On Thursday, transactions reached $166.61 million, up from $128.98 million on Wednesday. This growth in trading volume may reflect increased demand for foreign currency, which could be driven by factors like import requirements or other cross-border transactions.
A notable development from this currency movement is the narrowing of the rate gap between the parallel market and the NAFEM. On Wednesday, the difference between the parallel market and the NAFEM was N118.83 per dollar. By Thursday, this spread had reduced to N54.51 per dollar. This reduction suggests a slight alignment between the two exchange rates, although a substantial gap remains, highlighting ongoing concerns about foreign exchange stability in Nigeria.
