The Nigerian naira opened Wednesday at about ₦1,350 per US dollar in the official market, maintaining its recent gains despite a significantly higher exchange rate in the parallel market.
The latest official figures showed that the naira strengthened to ₦1,350/$ on Monday, August 17, from ₦1,358.25/$ recorded three days earlier.
The movement indicates relative stability in the formal foreign exchange market, where the naira has remained within a relatively narrow range in recent trading sessions.
Meanwhile, the dollar continued to trade at a premium outside the official market.
Available market data showed that parallel-market dealers were buying the dollar at approximately ₦1,405 and selling it at ₦1,415 on Tuesday.
At the prevailing selling rate, anyone looking to buy $1,000 would need about ₦1.415 million.
Conversely, someone selling $1,000 could receive approximately ₦1.405 million at the prevailing buying rate.
The difference between the official NFEM rate and the parallel-market selling rate stood at about ₦65 per dollar.
An indicative USD/NGN rate available on Wednesday also placed the dollar at around ₦1,350.24, although such live market rates are separate from the official NFEM fixing and can change during the day.
What could determine the naira’s next move?
The naira’s recent performance has come amid relatively stronger foreign exchange liquidity and improved dollar supply.
Market participants are now watching several factors that could determine whether the currency can sustain its current position.
These include crude oil earnings, foreign investment, remittances, importer demand for dollars, overall foreign exchange inflows and future decisions by the Central Bank of Nigeria, CBN.
The NFEM rate is calculated using a volume-weighted average of transactions conducted within Nigeria’s formal foreign exchange market.
The parallel-market rate, however, is not fixed and can vary depending on the dealer, location and size of the transaction.
The CBN does not recognise the parallel market as an official foreign exchange platform and advises individuals and businesses to obtain foreign currency through authorised channels.
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