Despite recent policy measures, the local currency continues to face pressure from elevated inflation and strong dollar demand, particularly for imports and overseas transactions.
Official Market Sees Mild Weakness
At the Nigerian Foreign Exchange Market (NFEM), the official window for government and corporate transactions, the naira recorded a marginal depreciation at the start of the week.
Data from the FMDQ Securities Exchange shows the currency closing at approximately ₦1,466.50 to the dollar. This comes after a volatile end to last week, when the exchange rate swung between ₦1,460.00 and ₦1,469.90 in Friday’s session.
Market watchers attribute the cautious pricing to macroeconomic fundamentals, including Nigeria’s inflation rate of about 14.45% and the Central Bank of Nigeria’s (CBN) elevated Monetary Policy Rate of 27.00%. Together, these factors continue to shape investor sentiment and sustain demand for dollars, particularly ahead of holiday travel and seasonal imports.
Parallel Market Maintains Premium
Outside the official window, the naira continues to trade weaker in the parallel market. Reports from Bureau De Change operators in major cities such as Lagos and Abuja indicate that the dollar is currently exchanging between ₦1,475 and ₦1,485.
Although the gap between official and informal rates has narrowed compared to earlier periods, the spread remains significant. The parallel market still serves as the primary source of foreign currency for individual travelers and small-scale importers who face delays or limited access at the NFEM.
For the CBN, this disparity remains a key challenge as it pushes toward greater exchange rate convergence and improved transparency across the market.
Banking Rates and Policy Signals
Recent data from the central bank places the benchmark exchange rate for basic transactions at around ₦1,464.50 per dollar. However, commercial banks are quoting higher rates for international card payments, in some cases approaching ₦1,485, reflecting additional charges and settlement costs.
These variations underscore the complexities still present within Nigeria’s FX framework, even as reforms continue to take shape.
Outlook: Stability Likely in the Near Term
Analysts expect the naira to remain relatively stable through the remainder of the year, barring any unexpected developments. Significant shifts in crude oil production, global oil prices, or surprise monetary policy announcements from the CBN could alter the trajectory, but none are currently anticipated.
Looking ahead to the first quarter of 2026, attention will likely focus on measures to boost dollar liquidity and sustain confidence in the FX market—key steps toward easing pressure on the naira and reinforcing long-term stability.