Nigeria’s foreign exchange market continues to witness sharp fluctuations as the naira faces intense pressure. According to data from the FMDQ Securities Exchange, the naira opened at ₦1,516.73 per dollar on January 29, 2025, and closed at ₦1,485.95 per dollar on January 30, 2025. However, in the parallel market, the dollar is trading as high as ₦1,628 per dollar, reflecting the ongoing volatility despite the Central Bank of Nigeria’s (CBN) policy reforms.
The CBN had previously announced the unification of all forex market segments, allowing the naira to float freely under the “Willing Buyer, Willing Seller” model. This move was expected to enhance transparency and improve liquidity. However, the black-market rates suggest lingering market inefficiencies and persistent demand-supply imbalances. While the reforms aim to stabilize the forex market, the disparity between official and parallel rates remains a major challenge for businesses and individuals dealing with forex transactions.
The implications of a floating exchange rate are significant. It means the value of the naira is now driven purely by market forces rather than direct CBN intervention. While this could attract more foreign investments in the long run, the short-term impact has been a sharp depreciation of the naira, increasing costs for imports, tuition payments, and travel expenses. As Nigeria navigates these changes, all eyes remain on the CBN’s next steps to restore confidence in the forex market and strengthen the local currency.