Naira Narrows Dollar Gap Between Official, Black Markets Amid Surge in Forex Inflow
- The Nigerian currency, the naira, traded flat in the official window and appreciated in the parallel market
- The development has led to a near convergence of the exchange rate on both windows amid reforms by the Central Bank of Nigeria (CBN)
- Recent data from the CBN shows that foreign exchange inflows rose 71% TO $1.31 billion week-on-week
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The exchange rate between the parallel market and official window narrowed again as the naira traded flat.
The development comes as the foreign exchange inflows surged 71% to $1.31 weekly, driven by foreign portfolio investors (FPIs).
Source: Getty Images
The naira narrows the gap in FX markets
The Nigerian currency has further narrowed the disparity between the two forex market windows to N2 per dollar.
According to data from Nigerian Foreign Exchange Market (NFEM), traders bought $1 for N1,535 on Monday, July 21, 2025, the same rate as Friday, July 18, 2025.
In the parallel segment of the foreign exchange market, also known as the black market, the naira appreciated to N1,533 per dollar, leaving the exchange rate gap of N2 between the two windows.
Analysts express divergent views
Analysts have expressed mixed feelings about the near convergence, stating that while it largely meets the forex reforms of the Nigerian government, the naira is highly devalued.
Osas Igho, a financial analyst, said the current rate is a depreciation and not a true representation of the naira’s value.
“Yes, this meets, to a large extent, the expectations of the Nigerian government regarding FX reforms, but it falls short on the consumer supply and demand side.
“The naira is grossly undervalued, and this is the bane of inflation in Nigeria,” he stated.
However, Janet Ogochukwu, a senior banker and economist, said the development is good for the naira, the economy and Nigerians.
She disclosed that the gap is insignificant and will reduce hoarding and discourage speculation.
Source: Getty Images
“This is the second time in two weeks this is happening, and I think it reflects effective policy implementation by the Central Bank of Nigeria (CBN).
Yes, the naira is facing a renewed volatility; it will emerge stronger, especially due to the rise in external reserves and FPI inflows,” she said.
External reserves rise
Last week, Legit.ng reported that Nigeria’s external reserves rose by $422 million to $37.822 billion.
The development came as the CBN injected about $800 million into the FX market amid liquidity crunch.
Naira ends 2-week winning streak
A prior report by Legit.ng disclosed that the naira faced renewed pressure in the foreign exchange market on Tuesday, July 8, 2025, as demand outstripped supply for the first time in two weeks.
The Central Bank of Nigeria (CBN) quoted the official dollar rate at N1,529.22 per dollar, representing a slight depreciation from N1,528.33 the previous day.
Data from the Nigerian Foreign Exchange Market (NFEM) shows that currency dealers quoted the dollar at a high of N1,532.50 per dollar and a low of N1,527.
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Proofreading by James Ojo, copy editor at Legit.ng.
Source: Legit.ng
