Naira Falls to N1,362/$ in Parallel Market as Official Window Gains

The naira depreciated to N1,362 per dollar in the parallel market yesterday from N1,357 on Monday. But it appreciated to N1,331.5 per dollar in the Nigerian Foreign Exchange Market, NFEM, according to Central Bank of Nigeria, CBN, data.

The CBN data showed the indicative exchange rate fell to N1,331.5 per dollar from N1,332.9 per dollar on Monday. That represents N1.4 appreciation for the naira in the official market.

Gap between parallel and official markets widens

The margin between the parallel market and the official market widened to N30.5 per dollar from N24.1 per dollar on Monday. The parallel market rate moved up while the official rate strengthened, leaving a wider spread between the two windows.

The parallel market remains a key reference for many individuals and businesses that cannot access official foreign exchange. When the gap widens, those buyers face higher naira costs for dollars. The official window, by contrast, showed a stronger naira, helped by rates published through NFEM.

Interbank turnover rises sharply

The value of interbank turnover in NFEM increased sharply by 334.8 percent to $313.6 million from $72.12 million on Monday. The turnover growth was also stated as 338 percent. The higher turnover came as the naira appreciated slightly in the official market and weakened in the parallel market.

Interbank turnover reflects activity among banks and authorised dealers in the official foreign exchange market. A jump from $72.12 million to $313.6 million signals more dollar trades passed through that window on the day.

What it means for the naira

The wider margin of N30.5 per dollar may keep pressure on the naira across both markets. It also means the cost of foreign exchange depends heavily on where a buyer sources dollars. For importers, travellers, and manufacturers, a parallel market rate of N1,362 per dollar raises the naira cost of goods and services tied to imports.

The official rate at N1,331.5 per dollar offers a lower rate, but access remains the deciding factor. If interbank turnover stays high, the official market may see more activity. If the parallel market rate continues to rise, the gap could widen further.