Exchange Rate Gap Between Official, Parallel Markets Widens as Forex Supplies Tighten
- Nigeria's naira gains slightly in the official market, closing at ₦1,423.17 per US dollar
- Parallel market faces pressure as dollar scarcity drives naira down to ₦1,480 per dollar
- Nigeria's external reserves rise to $45.67 billion amid global market volatility and rising oil prices
The gap between Nigeria’s official and parallel market exchange rates widened further last week as tight dollar supplies in the informal market pushed the naira in opposite directions across FX windows.
While the naira posted a modest gain at the official market, pressure intensified in the parallel market, where scarcity of foreign exchange drove the dollar higher and expanded the spread between both rates.
Source: Getty Images
Official market records weekly gain
At the official window, the naira appreciated week on week, supported by inflows from foreign portfolio investors and increased supply from local market participants.
According to the Central Bank of Nigeria’s (CBN) daily FX update, the naira closed the week at ₦1,423.17 per US dollar, representing a gain of ₦7.70 compared with the previous week’s close.
On average, the currency traded at ₦1,421.90/$ throughout the week. The official rate opened on Monday, January 5, 2026, with a slight 1 basis point appreciation to ₦1,429.31/$ and strengthened steadily to ₦1,418.26/$ by midweek.
However, as dollar demand began to outpace available supply towards the end of the week, the naira weakened slightly to close at ₦1,423.17/$ on Friday.
Parallel market weakens due to dollar scarcity
In contrast, the naira came under renewed pressure at the parallel market, reflecting tighter dollar availability in the informal segment of the FX market.
Traders reported that the currency depreciated by ₦5 week on week to close at ₦1,480 per dollar, underscoring persistent supply constraints despite relative stability at the official window.
As a result, the foreign exchange spread widened to 3.99 per cent from 3.09 per cent in the previous week, according to TrustBanc Financial Group Limited.
External reserves rise despite global uncertainty
Data from the CBN showed that Nigeria’s gross external reserves increased by $100.56 million to $45.67 billion, offering some buffer against external shocks even as global commodity markets remained volatile.
Oil prices, which initially dipped on supply disruptions from Venezuela, ended the week higher amid rising geopolitical tensions.
Brent crude gained $2.59, or 4.26 per cent week on week, to settle at $63.34 per barrel, while U.S. West Texas Intermediate rose $1.80, or 3.14 per cent, to $59.12 per barrel.
Concerns over escalating protests in Iran and developments in Russia’s war with Ukraine continued to drive supply risk premiums in the oil market.
Gold gains as investors seek safety
According to a report by MarketForces Africa, gold prices also recorded strong weekly gains as investors sought safe-haven assets amid policy uncertainty and weaker-than-expected U.S. payrolls data.
Spot gold climbed 4.16 per cent week on week to close at $4,510.45 per ounce, while gold futures rose 3.58 per cent to $4,500.90 per ounce.
Outlook remains cautious
Analysts at AIICO Capital expect markets to remain cautious and data-driven in the coming week, with investor attention focused on upcoming U.S. jobs data.
Source: Getty Images
Commodity prices, particularly oil, are also expected to continue influencing broader market direction amid ongoing global supply concerns.
Inside the forces powering naira's first weekly gain of 2026
Legit.ng earlier reported that after weeks of pressure and cautious sentiment, the naira has delivered an unexpected boost to the market, recording its first weekly gain of 2026 at the official foreign exchange window.
The local currency appreciated by N7.68 over the week, buoyed by improved dollar liquidity and stronger intervention by the Central Bank of Nigeria (CBN), offering a rare dose of optimism to businesses and investors.
Data from the Nigerian Foreign Exchange Market (NFEM) showed that the naira closed on Friday at N1,423.16 per dollar, compared with N1,430.84 at the end of the previous week.
Source: Legit.ng
