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Naira Inches Up, But Dollar Demand Stays High

The Naira showed a slight improvement in the official market, trading at ₦1,517.24 per dollar on March 7, 2025, compared to ₦1,512.30 the previous day. Despite this marginal gain, the black market rate remains significantly higher, with the dollar exchanging for ₦1,555 per dollar, reflecting ongoing demand pressures outside official channels.

Nigeria’s foreign exchange market has undergone significant reforms, with the Central Bank unifying all FX segments into the Investors & Exporters (I&E) window since June 2023. This move aimed to enhance transparency and liquidity, allowing the Naira to trade more freely. However, the persistent gap between official and parallel market rates suggests lingering market inefficiencies and speculative activities.

The CBN continues to implement policies to stabilize the exchange rate, including the “Willing Buyer, Willing Seller” model and the reintroduction of order-based two-way quotes. While these measures promote flexibility, the long-term trajectory of the Naira will depend on broader economic fundamentals, investor confidence, and the country’s ability to boost foreign exchange inflows.

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