Naira Gains Against Dollar In Parallel Market

The Nigerian naira saw a slight appreciation against the U.S. dollar in the parallel market on Friday, January 31, 2025.

The exchange rate closed at N1,610/$1, an improvement from N1,630/$1 recorded the previous day. This represents a N20 increase within a 24-hour period. In the same period, the British pound also weakened slightly against the naira, trading at N2,000/£1, down from N2,010/£1, marking a 0.50% decrease. Similarly, the euro saw a decline, closing at N1,655/€1, indicating a 0.91% gain for the naira against the European currency.

As of Thursday, the Central Bank of Nigeria (CBN) reported an official exchange rate of N1,493/$1. On Friday, the CBN’s rates showed the naira trading at N1,507.40/$1 (buying rate) and N1,508.40/$1 (selling rate). These official rates differ significantly from the parallel market rate, where the naira saw improvements, suggesting that the supply of dollars may have increased or that speculative pressures on the naira were reduced.

The improvement in the parallel market is a positive sign for the local currency, but analysts remain cautious. They warn that fluctuations are still likely due to various external factors, including changes in oil prices, remittance inflows, and overall investor sentiment toward Nigeria’s economy.

The foreign exchange market continues to face volatility, and experts suggest that further interventions from the Central Bank may be necessary to ensure sustained stability in the currency market.
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