The naira maintained relative stability at the official Nigerian Foreign Exchange Market (NFEM) fixing on Friday, even as it continued to trade at weaker levels on the parallel, or “black,” market.
At the NFEM Investors & Exporters window, the U.S. dollar was quoted near ₦1,460/$1, reflecting a slight intraday dip from earlier levels observed earlier this week. In contrast, the parallel market — where retail cash dollars change hands — remained elevated. Dealers in Lagos and other commercial hubs quoted the greenback between ₦1,495 and ₦1,515/$1, with some transactions reportedly hitting the ₦1,515 mark, putting the street average roughly around ₦1,500/$1.
Implications for Businesses and Consumers
For importers and corporates transacting through official windows, the exchange rate remains close to the NFEM fixing of about ₦1,460. Individuals buying or selling cash dollars on the streets, however, continue to face the higher parallel market rates, which raises the cost of remittances, foreign travel, and dollar-denominated goods.
Understanding the Persistent Gap
The widening gap between the official NFEM rate and the parallel market reflects differences in liquidity, access to official dollar supply, and prevailing market sentiment. Policy interventions by the Central Bank of Nigeria (CBN), including targeted foreign exchange support and recent monetary policy shifts, have been crucial in stabilizing the official rate. Analysts note that while the NFEM fixing remains steady, strong demand for cash dollars keeps parallel market rates elevated.
Outlook for the Market
Market participants are closely monitoring weekly FX turnover, potential new CBN interventions, and global dollar trends for indications of future movements. Increased official dollar supply through platforms like FMDQ and NAFEM could help maintain or strengthen the NFEM fixing. Conversely, sustained high demand for cash dollars could continue to keep the parallel market premium elevated.
The divergence between official and parallel rates highlights ongoing challenges in the Nigerian FX market, where policy measures and market dynamics continue to shape outcomes for both businesses and everyday consumers.