Exchange Rate Gap Between Official And Black Markets Widens as Naira Depreciates
- The exchange rate gap between the official and unofficial markets widened to about N25, showing volatility in the FX windows
- The local currency traded mixed earlier before trailing off at the end of trading on Tuesday, December 16, 2025
- The naira depreciated following mounting demand for the US dollar amid the Christmas season
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
The naira traded on a mixed note across Nigeria’s foreign exchange markets on Tuesday, December 16, 2025, as rising international payments and year-end import demand intensified pressure on dollar supply.
While the local currency appeared relatively calm at the official window, a widening gap emerged between the regulated and informal segments of the FX market.
Source: Getty Images
Official market faces dollar shortage
Analysts linked the renewed pressure largely to seasonal demand, with importers increasing dollar purchases ahead of year-end settlements.
Offshore dollar transfers to Nigerians also influenced market dynamics, moderating demand in the parallel market even as official supply remained tight.
At the Nigerian Foreign Exchange Market (NFEM), the Central Bank of Nigeria disclosed in its daily FX update that the official spot rate initially held steady at ₦1,451.82 per dollar, supported by earlier intervention.
However, limited inflows quickly exposed supply constraints.
Official data showed that the naira eventually depreciated to ₦1,456.20 per dollar, reflecting a shortage of US currency amid rising international payments.
AIICO Capital Limited reported that the naira weakened by ₦4.38 during the session, with trades conducted between ₦1,454.00 and ₦1,457.00 per dollar.
The pressure was driven by thin dollar inflows from exporters, non-bank corporates and foreign portfolio investors, combined with the absence of immediate CBN intervention to boost liquidity.
CBN intervention keeps year-end hopes alive
Despite the short-term weakness, market sentiment remains cautiously optimistic.
Analysts expect the naira to close the year relatively stable, with ₦1,500 per dollar viewed as a worst-case scenario under sustained CBN support.
The monetary authority has repeatedly signalled its commitment to maintaining stability through 2025, backing the local currency with targeted interventions and improved FX management.
This approach, analysts say, is aimed at ensuring the naira retains stamina against the dollar amid volatile global conditions.
Parallel market shows divergent trend
In contrast to the official market, the naira recorded marginal appreciation in the parallel segment, trading around ₦1,476 per dollar.
The movement highlighted the growing divergence between the regulated FX window and the informal market, where offshore transfers and reduced speculative demand helped ease pressure.
The contrasting performance underscored the structural imbalance in Nigeria’s FX system, as official supply struggles to keep pace with demand while informal channels adjust more rapidly.
Reserves rise as oil prices slide
Nigeria’s gross external reserves continued their upward trajectory, rising to $45.47 billion, representing an 11.24% year-to-date increase.
Market Forces Africa also cited CBN comments suggesting reserves had climbed as high as $46.7 billion, although official figures remain slightly lower.
The reserve buildup came even as global oil prices weakened. Brent crude fell by more than 2 per cent to below $60 per barrel, its lowest level since May, amid growing optimism over a potential peace deal in the Russia-Ukraine conflict.
Source: Getty Images
A possible easing of sanctions on Russian oil could further increase global supply, adding another layer of uncertainty to Nigeria’s FX outlook.
Still, analysts say rising reserves provide a critical buffer as Nigeria navigates external shocks and domestic FX pressures.
CBN moves to crash dollar with $150m sale
Legit.ng previously reported that the CBN sold $150 million to authorised dealer banks in a fresh attempt to ease pressure on the naira and improve dollar liquidity in the official market.
Updated market data shows that the intervention came as demand for foreign currency continued to outstrip supply, leading to another round of weakness for the local currency.
FX inflows have remained sluggish despite recent improvements in oil receipts. This imbalance has allowed the dollar to maintain an upper hand, pushing the naira beyond levels analysts expected at this stage of the year.
Source: Legit.ng
