The naira recorded modest gains against the U.S. dollar on Tuesday, appreciating in both the parallel market and the official foreign exchange window as the gap between the two markets continued to narrow.
In the parallel market, the local currency strengthened to ₦1,385 per dollar, improving from ₦1,395 per dollar recorded on Monday. The movement reflects a ₦10 gain for the naira in the informal segment of the foreign exchange market.
A similar trend was observed in the official market, where data from the Central Bank of Nigeria showed that the indicative exchange rate in the Nigerian Foreign Exchange Market (NFEM) appreciated to ₦1,360.22 per dollar from ₦1,366 per dollar in the previous trading session.
The latest figure represents an appreciation of ₦5.78 for the local currency at the official window.
With gains recorded in both market segments, the spread between the official and parallel market rates narrowed further.
The margin declined to ₦24.78 per dollar from ₦29 per dollar recorded on Monday, suggesting improved convergence between the two exchange rate windows.
Analysts often view a narrowing gap as a positive indicator for market stability, as wide disparities between official and parallel market rates can encourage speculative activity and arbitrage.
Despite the naira's stronger performance, trading activity in the interbank foreign exchange market weakened during the session.
Market turnover fell by 5.11 per cent to $168.82 million, compared with $177.92 million recorded a day earlier.
The decline in transaction volume indicates lower market activity, even as the local currency posted gains against the dollar.