N1,378/$: Naira Appreciates at Official Market but Weakens to N1,413/$ in Parallel Market
- The gap between Nigeria's official and parallel foreign exchange markets widened last week, raising concerns about demand pressure on the naira
- Nigeria's external reserves climbed to $51.743 billion, supported by crude oil earnings and stronger foreign portfolio investment inflows
- The CBN is targeting $1 billion per month in official diaspora remittances by the end of 2026
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
Nigeria's official and parallel foreign exchange markets drifted further apart last week, as the naira held steady through official channels while slipping against the dollar in the informal market.
Data from the Central Bank of Nigeria (CBN) showed the naira closed the week at N1,380.18 to the dollar in the official market, broadly unchanged from the previous week.
Source: Getty Images
In the parallel market, however, the currency weakened to N1,413 per dollar, down from N1,400 the week before, a depreciation of N13.
The divergence pushed the premium between the two markets to N32.82, or 2.38 per cent, compared with N20.38, or 1.48 per cent, a week earlier.
The widening gap points to growing demand for dollars outside the formal banking system, typically a sign that buyers are struggling to access sufficient foreign exchange through official channels.
Nigeria's external reserves hit $51.74bn
Despite the pressure in the informal market, Nigeria's gross external reserves continued to rise, reaching $51.743 billion and edging closer to the $52 billion mark.
The improvement has been driven by higher crude oil export earnings, increased foreign portfolio investment inflows, and CBN measures aimed at boosting liquidity in the foreign exchange market.
A larger reserves buffer generally gives the CBN more room to intervene and support exchange rate stability.
However, analysts at MoneyAfrica have cautioned that reserve growth alone may not be enough to ease parallel market pressure if dollar demand continues to exceed official supply.
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CBN Governor Cardoso says Nigeria’s diaspora remittances to hit $1Bn monthly by end of 2026
CBN eyes $1bn monthly in diaspora remittances
The CBN has set a target of raising official diaspora remittance inflows to $1 billion per month by the end of 2026.
The apex bank said remittances through formal channels have already tripled from about $600 million per month since it introduced sweeping foreign exchange reforms in late 2023.
That increase of roughly 200 per cent has been driven by the harmonisation of exchange rates, the removal of multiple exchange rate windows, and efforts to channel funds from Nigerians abroad through regulated financial institutions.
Source: Getty Images
Market watchers will be closely monitoring whether stronger reserves and growing remittance flows can close the widening premium between the two markets.
If demand in the parallel market continues to outpace what official channels can supply, analysts warn the naira could face sustained pressure despite Nigeria's improving external position.
Naira strengthens against the dollar
Legit.ng earlier reported on the naira's performance in the official forex market, noting its appreciation against the US dollar and a surge in interbank FX turnover.
As the Central Bank of Nigeria reports a slight increase in gross external reserves, the call for Nigerians to avoid hoarding the naira emphasises a plea for responsible currency management amidst fluctuating exchange rates.
Source: Legit.ng
