CBN Confirms Dollar Exchange Rate Gap Between Official, Parallel FX Markets
- CBN has confirmed that the gap between official and parallel dollar rates fell from 50%
- Nigerian currency appreciated by 2% officially to N1,366.23, while the parallel market was unchanged
- The apex bank said its reforms boosted liquidity, investor confidence and capital inflows
Legit.ng journalist Dave Ibemere has experience in business journalism, with in-depth knowledge of the Nigerian economy, the stock market, and broader market trends.
Olayemi Cardoso, the Governor of the Central Bank of Nigeria, has said reforms in Nigeria’s foreign exchange market have reduced the gap between the official and parallel market rates.
Cardoso noted that the premium between the two markets has dropped from about 50% in 2022 to less than 2% on average in 2025.
Source: UGC
According to him, the reforms have also improved liquidity in the foreign exchange market and strengthened investor confidence.
Naira to dollar exchange rate
The naira appreciated by about 2% last week, trading at N1,366.23 per dollar in the official market, while it remained unchanged in the parallel market at N1,410 per dollar.
Speaking in Lagos, Cardoso said the improvement reflected deliberate steps taken by the central bank to eliminate multiple exchange rates and restore order to the foreign exchange system.
Cardoso said:
“Our commitment to transparent, well-governed, and functional markets is clear in the foreign exchange market.
“Through deliberate policy actions, we eliminated the system of multiple exchange rates that had previously benefitted only a privileged few. At the same time, we reduced the parallel market premium from around 50% in 2022 to less than 2% on average in 2025.”
He noted that the reforms have enabled market participants to transact more efficiently without relying heavily on central bank interventions.
He said:
“Today, the foreign exchange market operates with far greater liquidity and efficiency. The backlog of unmet demand has been cleared, and market participants can transact without relying on extraordinary Central Bank interventions."
Cardoso said the relative stability currently being observed in the naira is the result of deliberate efforts to rebuild trust and strengthen confidence among both domestic and international investors.
Source: Getty Images
The governor added:
“To be clear, the relative stability of the currency we are seeing today is not an accident but the result of deliberate efforts to rebuild trust and strengthen the confidence of both domestic and international investors."
Forex inflow
He further disclosed that capital and investment inflows into Nigeria have increased in recent years due to the reforms.
Cardoso stated:
“We have also seen almost a 200% increase in capital and investment flows between 2023 and 2025."
The CBN governor also noted that Nigeria’s external reserves have strengthened, reflecting improvements in the country’s balance of payments and growing investment inflows.
He said.
“Our external reserves have recently exceeded $50 billion, reflecting structural improvements in our balance of payments and increasing investment flows into the Nigerian economy."
Why are foreign reserves important?
Earlier, Legit.ng reported that foreign reserves serve as a buffer to support the stability of the Nigerian currency in the international foreign exchange market.
When the CBN intervenes in the foreign exchange market, it uses its foreign reserves to influence the supply and demand of the Naira.
The foreign reserves also serve as a means to protect against external shocks and ensure the country's ability to meet its international obligations.
Source: Legit.ng
