Naira Falls to N1,260/$ in Parallel Market, Widening Gap with Official Exchange Rate

  

Naira Falls to N1,260/$ in Parallel Market, Widening Gap with Official Exchange Rate

Lagos, Nigeria — The Nigerian Naira continued its downward trend on Monday, trading at N1,260 to the US dollar in the parallel (black) market, marking a further divergence from the official exchange rate of N1,145 per dollar set by the Central Bank of Nigeria (CBN).

Traders in Lagos and other major commercial hubs reported heightened activity in the parallel market, as demand for foreign currency remained strong amid persistent supply constraints. The widening gap between the official and parallel market rates underscores growing concerns over liquidity and the effectiveness of current monetary policies.

“The Naira has been under pressure due to increased demand for dollars from importers and limited supply from official channels,” a currency dealer said.

Analysts note that the persistent disparity is fueling speculation and driving prices higher in informal markets. Many businesses that rely on imports are feeling the strain, which could translate into higher prices for goods and services, adding pressure to inflation rates.

The Central Bank of Nigeria has repeatedly urged market participants to transact through official channels and maintain compliance with foreign exchange regulations. Despite these efforts, the parallel market continues to reflect significant deviations from official rates, driven by strong demand and limited intervention.

Economists warn that if the trend continues, it may impact investor confidence and slow economic growth, particularly in sectors dependent on foreign currency for operations. Market watchers also anticipate possible policy adjustments in the coming weeks to stabilize the currency and bridge the gap between official and parallel market rates.

Conclusion

The Naira’s dip in the parallel market highlights ongoing challenges in Nigeria’s foreign exchange landscape. While the CBN continues to monitor and intervene where necessary, traders and businesses are adapting to the realities of a market marked by volatility and high demand for foreign currency.