Naira Exchange Rate: Black Market, Official Windows Sell Dollar at Same Rate, Expert Explains How
- The Central Bank of Nigeria (CBN) has unified the foreign exchange markets through circular issuances
- Zeal Akaraiwe, CEO of Graeme Blaque, disclosed that CBN achieved that through policy implementations, market corrections and enhanced transparency
- He noted that CBN did not defend the naira, though the external reserves depreciated by over $2 billion in the last three years
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Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
In the past 18 months, the Central Bank of Nigeria has carried out policy implementations, market liberalisation, and enhanced transparency to address exchange rate differences.
Zeal Akaraiwe, the CEO of Graeme Blaque, disclosed in a recent TV interview how the apex bank achieved the naira stability.
Source: Getty Images
Parallel and official windows converge
This year, the parallel market rate has appreciated steadily, stabilising at the N1,500 per dollar ceiling.
Feelers from Bureau de Change (BDC) operators show that the rate in the parallel market currently trades around N1,500, while the official window is about N1,501 per dollar as of February 25, 2025.
The near convergence between the two segments shows a significant alignment.
Akaraiwe disclosed that policy corrections contributed greatly to correcting the anomaly in the forex management.
CBN correcting past mistakes with circulars
According to him, players have complained about the apex bank’s circulars in the last 15 to 18 months, saying that the CBN was not regulating the market by body language.
He said that past mistakes needed corrections via circulars to make it clear to the industry and the best way to do that was via circular issuances.
He said the supposed deluge of circulars last year was to ease bottlenecks in FX trading.
In 2024, the regulator issued almost 20 circulars around FX management, including the use of Bloomberg’s BMatch system in the interbank FX trading.
CBN is not defending the naira
Akaraiwe said introducing the BMatch platform in December exposed the information gap in the FX system for most of last year.
The financial analyst said that FX inflows into the economy exceeded the outflows for most of 2024 but went unnoticed.
Source: Getty Images
According to him, CBN is not defending the naira, despite the forex reserves depletion by $2.2 billion in the last three weeks.
However, Akaraiwe noted that in 2024, CBN’s net contribution to the forex market accounted for three per cent, a contrast to the 70 to 80% recorded in previous years.
He revealed that in 2022 and 2023, CBN supplied as much as 70 to 80% of FX used in the market.
He disclosed that in 2024, CBN's contribution to forex sales in the market declined to under 10%.
Naira trades flat in official window
Meanwhile, the naira traded flat in the Nigerian Foreign Exchange Market (NFEM) on Thursday, February 27, 2025.
The Nigerian currency opened trading at N1,499.07, closing at N1,496, appreciating by N4 per dollar on inter-day trading.
However, the naira’s performance on Thursday differed from the previous day’s rate by N1 as it exchanged at N1,496 on Wednesday, February 26, 2025.
Currency traders quoted the dollar at a high of N1,500 and a low of N1,496, which became the closing rate.
Naira sustains gains in all markets
Legit.ng earlier reported that since the CBN introduced the Electronic Matching System (EFEMS), Nigerian currency has appreciated against the British pound sterling, euro, and Canadian dollar.
The apex bank mandated all banks and authorised dealers in the interbank foreign exchange market to migrate to the Bloomberg BMatch System for trading to boost transparency and efficiency.
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Source: Legit.ng
