LAGOS, Nigeria (FN), The naira showed mixed fortunes on Monday, appreciating slightly in the parallel market but weakening in official trading. Dealers said the currency rose to N1,387 per dollar in the parallel market, compared with N1,389 last Friday. However, in the Nigerian Foreign Exchange Market (NFEM), the naira depreciated to N1,349.7 per dollar.
The divergent movement reflects ongoing volatility in Nigeria’s foreign exchange system, where rates often differ sharply between the official and parallel markets. Analysts say the gap underscores persistent pressure on dollar supply and investor confidence, despite recent reforms by the Central Bank of Nigeria (CBN).
Nigeria has faced similar episodes in the past. In 2021, the naira weakened in official trading even as parallel market rates stabilized, prompting calls for harmonization. In 2023, the CBN unified multiple exchange windows in an effort to reduce arbitrage, but volatility continued as demand for foreign currency outpaced supply.
Reactions to Monday’s development were mixed. Traders in Lagos welcomed the slight appreciation in the parallel market, saying it offered some relief for importers and households. Economists, however, cautioned that depreciation in the NFEM signals underlying weakness, warning that sustained instability could deter investment. On social media, Nigerians expressed frustration over the currency’s swings, with many urging the government to strengthen reserves and stabilize the forex market.
Observers note that the naira’s performance remains a key test of economic policy under President Bola Tinubu’s administration, which has pledged to restore investor confidence and ensure transparency in currency management.
