The Central Bank of Nigeria (CBN) recognises the Nigerian Foreign Exchange Market (NFEM) as the country’s official foreign exchange market, with the volume-weighted average rate serving as the benchmark for authorised transactions.
The relative stability recorded in recent trading sessions suggests that ongoing foreign exchange reforms have continued to support price moderation in the official market.
In the parallel market, commonly referred to as the black market, the higher exchange rate reflects continued demand for foreign currency outside the formal market, where access to dollars remains limited for some importers, businesses and individuals.
Although the gap between the official and parallel market rates has narrowed compared to previous periods, many Nigerians still rely on the unofficial market to meet urgent foreign exchange needs.
Market analysts say the spread between the two markets remains an important indicator of foreign exchange liquidity and investor confidence, with a narrower gap generally viewed as a sign of improving market conditions.
Foreign exchange rates remain subject to fluctuations throughout the trading day based on demand, supply, liquidity and overall market sentiment. Rates in the parallel market may also vary slightly depending on location and individual currency dealers
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