Black Market Dollar Rate Jumps to N1,400/$ as Nigeria’s FX Market Shows Fresh Cracks
- The naira traded at about N1,400 per dollar in the parallel market as strong demand for foreign currency continued outside the official FX window.
- In contrast, the naira strengthened in the official market last week, closing at N1,362.21 per dollar due to improved dollar inflows and stronger liquidity.
- Unmet demand and delays in accessing dollars through official channels are widening the gap between official and parallel market exchange rates
Legit.ng journalist Victor Enengedi has over a decade's experience covering energy, MSMEs, technology, banking and the economy.
Nigeria’s foreign exchange market is once again showing signs of fragmentation, as persistent demand for dollars outside official channels continues to fuel activity in the parallel market.
Checks by Daily Sun revealed that at the start of trading on Monday, the naira exchanged at N1,395 per dollar for buying and N1,400 per dollar for selling in the black market.
Source: UGC
The rates reflect sustained demand for foreign currency among individuals and businesses unable to access dollars through the official market promptly.
The premium being paid in the informal market highlights the readiness of buyers to secure dollar liquidity despite higher costs, especially where access through formal channels remains limited or delayed.
Official market records gains amid stronger liquidity
The situation contrasts with developments in the official foreign exchange market, where the naira has recently enjoyed improved stability supported by stronger dollar inflows and enhanced liquidity conditions.
Last week, the local currency appreciated to N1,362.21 per dollar at the official window, gaining N11.04 from the previous week's closing rate of N1,373.25 per dollar. During the week, the naira strengthened further to N1,357.26 per dollar, its best performance in almost a month.
Market analysts attributed the rally to increased offshore inflows linked to Open Market Operations (OMO) auctions, which helped offset domestic demand pressures.
However, while the official market strengthened, the parallel market moved in the opposite direction. The naira weakened from N1,375 per dollar to N1,398 per dollar over the same period, representing a depreciation of N23.
Consequently, the gap between official and parallel market rates widened significantly, with the premium rising to N35.79, or 2.63 per cent, compared to just N1.75, or 0.13 per cent, a week earlier.
Unmet dollar demand continues to drive informal market
Despite Nigeria’s external reserves surpassing the $50 billion mark, foreign exchange market operators say structural challenges remain.
Bureau de Change (BDC) operators who spoke with Daily Sun noted that many legitimate dollar requests are still not being fully met in the official market.
They explained that delays in allocation and mismatches in supply timing often encourage market participants to seek alternatives in the parallel market.
A BDC operator in Ajah, Yusuf Danladi, said the widening gap between official and unofficial exchange rates reflects ongoing segmentation within the country’s FX system.
According to him, although recent reforms and increased foreign currency inflows have improved conditions in the official market, many end-users continue to experience difficulties accessing foreign exchange.
He said:
“While reforms and inflows have supported stability in the formal window, transmission to end-users remains uneven."
Source: Getty Images
He warned that the growing reliance on the parallel market, even when premiums remain relatively modest, points to underlying pressures that could persist unless access to foreign currency becomes more efficient.
Market observers maintain a cautiously optimistic outlook for the naira, citing stronger external reserves, sustained inflows, and relatively healthy liquidity in the official market.
CBN sells $81 million to BDCs
In related news, Legit.ng reported that the CBN released $81 million to Bureau De Change operators, continuing efforts to ease pressure on the foreign exchange market.
This followed an earlier $18 million injection aimed at supporting the naira as volatility resurfaced in the official market.
Economists said the latest allocation should help improve market confidence and provide short-term stability for the currency.
Source: Legit.ng
