The exchange rate between the Naira and the Dollar has sparked attention as it continues to fluctuate across various markets. On December 23, 2024, the official rate closed at ₦1,544.20 per $1 on the FMDQ exchange platform. However, in the black market, the Naira traded at a significantly higher rate of ₦1,660 per Dollar, despite earlier efforts by the Central Bank of Nigeria (CBN) to unify the foreign exchange market.
In a circular issued in June 2023, the CBN had announced the collapse of multiple FX segments into the Investors & Exporters (I&E) window. This move was aimed at increasing transparency and aligning the exchange rate with market dynamics. The policy also reintroduced the “Willing Buyer, Willing Seller” model, allowing transactions to occur at market-driven rates while maintaining oversight for specific sectors like medicals and school fees.
The floating exchange rate approach, while fostering flexibility, has led to notable disparities between official and parallel market rates. Market forces now play a major role in determining the Naira’s value, reflecting both global economic shifts and domestic currency pressures. This policy adjustment underscores Nigeria’s ongoing challenges in stabilizing its currency.