The Naira continued to trade at a wide margin between the official and parallel foreign exchange markets on Sunday, October 19.
On the official Nigerian Foreign Exchange Market (NFEM), the Naira hovered in the mid-₦1,400s per dollar, while black market (parallel market) rates ranged between ₦1,485 and ₦1,500. This persistent gap between the official rate and the street value continues to strain importers, small businesses, and travellers who rely on swift dollar access.
While the official rate has shown signs of stability in recent days after earlier volatility, the parallel market remains under pressure, reflecting ongoing dollar scarcity for certain types of transactions. The premium seen on the street largely stems from the urgency of demand and limited availability through formal channels. A combination of global economic shifts, domestic currency pressures, and sporadic Central Bank interventions has kept the market fragmented.
The divergence is driven by supply and market structure differences. Banks and authorised dealers access dollars via regulated channels, often with restrictions, while black market traders respond directly to cash demand, causing faster and sometimes sharper rate fluctuations.
This disconnect has real-world consequences. Importers facing delays or restrictions in the official market are often forced to pay higher rates in the parallel market, driving up the cost of goods. These costs are frequently passed on to consumers, contributing to inflation in imported products.
For remittance recipients and international travellers, the choice between using official bank rates and street rates depends on availability and urgency. While official rates may offer better value, limited access and processing times can make the parallel market a more immediate, though more expensive, alternative.
