The Naira continues its turbulent ride against the U.S. dollar, reflecting the ongoing adjustments in Nigeria’s foreign exchange market. According to FMDQ Securities Exchange data, the official exchange rate opened at ₦1,505 per dollar on February 4, 2025, and closed slightly lower at ₦1,499.76 per dollar on February 5, 2025. Meanwhile, in the parallel market, the Naira has plunged as low as ₦1,620 per dollar, despite the Central Bank of Nigeria’s (CBN) efforts to unify all FX market segments.
The CBN’s policy shift, which began in June 2023, consolidated all foreign exchange windows into the Investors & Exporters (I&E) window, aiming for a market-driven exchange rate. The bank reinstated the “Willing Buyer, Willing Seller” model, removed trading limits on oversold FX positions, and introduced an order-based two-way quote system to enhance transparency. Despite these measures, liquidity concerns and speculative activities continue to drive volatility in the Naira’s value.
As Nigeria moves toward a fully floating exchange rate, market forces now dictate the Naira’s trajectory. The CBN has reduced direct intervention, allowing demand and supply to shape pricing. While this policy shift aims to stabilize the forex market in the long run, its immediate impact has been a widened gap between the official and parallel market rates, leaving businesses and individuals grappling with uncertainty.