Naira gains as dollar sold for N1,535 in black market

The naira appreciated to N1,535 per dollar in the parallel market, commonly referred to as the black market, driven by reduced demand for the dollar amid improved liquidity conditions.

This marks a gain of N25, or 1.6%, compared to the N1,560 per dollar exchange rate recorded on Monday in the same market. Data compiled from online trading platforms and street traders confirmed the development. “There is not much demand in the market, but we have enough dollars,” a trader noted.

In the official foreign exchange (FX) market, the naira also strengthened against the dollar on Tuesday, according to figures published by the Central Bank of Nigeria (CBN) on its website.

After trading activities concluded for the day, the dollar was quoted at N1,510 per dollar, reflecting an improvement from the N1,512 per dollar rate reported on the previous trading day at the Nigerian Foreign Exchange Market (NFEM), as indicated by CBN data.

Authorised dealers quoted the highest exchange rate at N1,515 per dollar on Tuesday, maintaining the same level as Monday’s rate. The market recorded its lowest exchange rate at N1,504 per dollar over two consecutive trading sessions.

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Olayemi Cardoso, governor of the CBN, noted the ongoing reforms in the financial markets aimed at addressing distortions that had previously caused a significant disparity between official and parallel market exchange rates, at times reaching as high as 60%. He pointed out that with consistent policy measures, enhanced market confidence, and increased transparency in forex trading, the disparity has significantly reduced to approximately 4 to 5%.

Cardoso made these remarks while advocating for stronger economic ties between Nigeria, the Middle East, and the Nigerian diaspora in the region. He pointed out the potential benefits of such partnerships in boosting remittance flows into the country, which could further stabilise the foreign exchange market.

He noted key measures introduced by the CBN to enhance transparency and efficiency in the forex market. These include the adoption of an electronic matching system to improve trade visibility and the implementation of a foreign exchange code of ethics, which all Nigerian banks have signed to ensure compliance with market rules.

As a result of these strategic interventions, Cardoso disclosed that Nigeria’s foreign reserves have now exceeded $40 billion, marking the highest level in nearly three years.

However, the Nigerian foreign currency reserves have declined to $38.88 billion as of February 17, 2025, according to the data from the CBN website.

He acknowledged that Nigeria had previously faced severe economic challenges, including capital flight, multiple exchange rate regimes, currency depreciation, high inflation, and a backlog of unresolved foreign exchange transactions. These issues had collectively undermined confidence in the nation’s currency.

Upon assuming office, Cardoso stated that his administration prioritised restoring market confidence by addressing the backlog of foreign exchange transactions while reinforcing the government’s commitment to ensuring economic stability.