Naira Nears Exchange Rate Convergence as Gap Shrinks to N70
The Nigerian naira is inching closer to a convergence at both the official and parallel markets, with only a N70 difference between the two exchange windows. While the naira continued its downward trend at the official window for the fourth consecutive day, it appreciated significantly in the black market, closing the gap between both rates.
Data from the FMDQ Securities Exchange revealed that the naira depreciated at the official market, closing at N1,500.65/$1 on Thursday, February 6, 2025, compared to N1,499.76/$1 on Wednesday, February 5, 2025. This decline represents a marginal loss of N0.89 for the local currency.
However, the situation was different in the parallel market, where the naira strengthened against the dollar, gaining N20 to trade at N1,570/$1, down from the previous day’s rate of N1,590/$1.
The positive trend extended to other major currencies as well. The naira appreciated by N40 against the British pound, trading at N1,950/£1 compared to the previous day’s rate of N1,990/£1. It also gained N20 against the euro, exchanging at ₦1,620/€1 from ₦1,640/€1 recorded the previous day. Meanwhile, the naira maintained stability against the Canadian dollar, remaining at N1,280/CA$1.
Market analysts suggest that the naira’s performance in the parallel market could be attributed to increased dollar liquidity and reduced speculative demand. The Central Bank of Nigeria (CBN) has been implementing various policy measures to unify exchange rates and stabilize the currency. The narrowing gap between the official and black-market rates indicates that the naira may be on the path to a single exchange rate regime.
As the foreign exchange market continues to respond to economic policies and external factors, stakeholders will be closely watching how the naira progresses in the coming days.
