New Exchange Rate Emerges as Naira Continues Downward Spiral Towards N1,600 Per Dollar
- The Nigerian Foreign Exchange market has seen a spike in demand for the US dollars since last week
- This pressure has fuelled the naira depreciation, pushing it closer to N1,600/$ on the parallel market
- Recent checks also show that the official rate and the parallel market rates are growing apart, raising concerns of arbitrage
Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.
Naira seems to have ended the rally, and now the downward trend is continuing, triggered by increasing demand for the dollar.
Despite starting the week at an exchange rate of N1,540/$ on the official market, the naira is now sliding closer to N1,600/$ on the parallel market.
Checks show that since Monday, the dollar has traded within a range of N1,550 and N1,590 on the parallel market.
Source: Getty Images
It now trades at N1,585 on the parallel market, with market pressures pushing it closer to N1,600.
Official rate widens from the parallel market
The Guardian reported that the exchange rate on the Central Bank of Nigeria’s Nigerian Foreign Exchange Market (NFEM), still hovers around N1,538/$.
This shows a widening difference between the parallel markets and the official market rate, leaving plenty of room for FX arbitrage.
Recall that the introduction of the EFEMs in December 2024 gradually closed the gap between official and parallel market rates.
In February 2025, Legit.ng reported that both market rates had unified at N1,500/$, completely ruling out possibilities of FX arbitrage.
The new development of a wide difference in the official and parallel market rates leaves arbitrage gaps that may be exploited.
Recall that market analysts predicted that the naira would appreciate in March 2025, but so many things have happened since then.
CBN promises FX market stability
The Central Bank of Nigeria has expressed its commitment to ensuring stability in the FX market and addressing the economic challenges facing Nigeria.
Read also
Naira continues free fall despite CBN intervention as demand for foreign exchange increases
Source: Getty Images
CBN governor, Olayemi Cardoso, gave this reassurance while playing host to a delegation of 50 scholars from the Harvard Kennedy School (HKS), Harvard Business School, Massachusetts Institute of Technology (MIT), and Stanford University, visiting Nigeria and Ghana as part of their Africa Trek.
Cardoso noted that the apex bank was recording progress in its effort to curb inflation, and the recent visits from top executives of JP Morgan, Citibank and the International Monetary Fund (IMF) showed that foreign investors were not oblivious to the moves.
The president of HKSAAN, Adaora Ndukwe, and HKS Nigeria Trek Delegation Lead, Sheffy Kolade, thanked the CBN for hosting the Africa Trek Delegation and demonstrating commitment to engage with future policymakers.
Expert gives reasons for continued naira depreciation
In related news, an economist, Dr. Marcel Okeke, explained why the naira has weakened against the dollar in recent weeks.
Okeke noted that Dangote Refinery's decision to sell its products for dollars has increased the number of market players in need of Foreign exchange.
He added that the CBN interventions may not be able to stabilise the naira due to this increased demand.
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Source: Legit.ng
