The foreign exchange market in Nigeria remains turbulent as the Naira struggles against the US Dollar. According to data from the FMDQ Securities Exchange, the Naira officially opened at ₦1,503.14 per $1 on February 5, 2025, before closing slightly stronger at ₦1,500.65 on February 6, 2025. However, in the parallel market, the story is different, with the Naira trading as high as ₦1,552 per Dollar, reflecting the persistent pressure on the local currency despite the Central Bank of Nigeria’s (CBN) unification of all FX market segments.
The CBN, in its circular dated June 14, 2023, reaffirmed its commitment to a market-driven forex system, merging all FX windows into the Investors and Exporters (I&E) window. This move introduced the “Willing Buyer, Willing Seller” model, eliminated trading limits on oversold positions, and reintroduced an order-based quote system to enhance transparency. The operational FX rate for government transactions is now derived from the weighted average of the previous day’s executed trades.
These changes indicate a shift towards a floating exchange rate system, allowing market forces to dictate the Naira’s value. However, the widening gap between the official and black-market rates highlights ongoing structural challenges. As Nigeria navigates this transition, businesses and individuals must remain strategic in their forex dealings, as rates may fluctuate significantly based on market dynamics.