On the flip side, the British pound dipped a bit against the naira, trading at N2,000/£1 on Friday, down from N2,010/£1 on Thursday, which is a 0.50% drop.
The euro also took a hit, closing at N1,655/€1, showing a 0.91% gain for the naira against the euro.
This shift in the parallel market comes after the Central Bank of Nigeria (CBN) reported an official exchange rate of N1,493/$1 as of Thursday. On Friday, the CBN’s rates showed the naira at N1,507.40/$1 for buying and N1,508.40/$1 for selling.
The rise in the parallel market suggests there might be more dollars available or less speculation affecting the local currency.
While the naira’s slight improvement is encouraging, analysts warn that there could still be ups and downs due to outside factors like oil prices, remittances, and how investors feel about Nigeria’s economy.
The foreign exchange market is still pretty volatile, and the central bank might need to step in again to keep things stable.
The CBN has been rolling out various forex interventions and policies to stabilize the naira. This includes tightening rules for Bureau De Change operators and boosting dollar availability in the official market.
Just this week, CBN Governor Olayemi Cardoso made it clear that any breaches of the newly introduced Nigeria Foreign Exchange (FX) Code will face tough penalties. He emphasized the Central Bank's commitment to promoting ethical practices and transparency in the forex market. Analysts view the FX Code as a groundbreaking move by the CBN, setting out clear and enforceable standards for ethical behavior, governance, and compliance in Nigeria's forex scene. Cardoso stated, “The FX Code marks a new era of compliance and accountability. It is not just a set of recommendations; this is an enforceable framework. Under CBN Act 2007 and BOFIA Act 2020, violations will be met with penalties and administrative actions.”
The CBN also reported a notable drop in Nigeria’s foreign exchange reserves, which fell by $832.62 million in just two weeks this January 2025, from January 6 to January 21.
Back in April 2024, Nairametrics highlighted that Nigeria’s forex reserves took a significant hit, dropping around $2.16 billion over 29 days, despite the CBN's strong efforts to stabilize the naira.