FX Market Shows Mild Stability with Naira Holding Firm in Mid-₦1,400s

The naira traded steadily against the U.S. dollar on Wednesday, October 29, 2025, closing around ₦1,455–₦1,458 in the official Nigerian Foreign Exchange Market (NFEM) window, while the parallel market quoted the dollar between ₦1,480 and ₦1,500. The figures highlight the persistent gap between official market transactions and rates offered by bureaux-de-change and informal street traders.

Market data show that the naira maintained a narrow trading band in the official window, supported by improved foreign exchange liquidity and inflows into local assets. In contrast, higher quotes in the parallel market reflected sustained demand from importers and retail buyers seeking limited dollar supply outside the NFEM.

Analysts attribute the enduring spread between the two markets to differences in liquidity and participation. The official NFEM rate reflects transactions by banks, corporates, and FMDQ-listed traders, while the parallel market remains dominated by retail and business-to-business transactions. Policy expectations have also played a role – the Central Bank of Nigeria’s recent communication on interest rates and FX interventions, coupled with easing inflation and a modest rate cut in September, have influenced sentiment and capital flows.

Import-related demand, corporate remittance timing, and periodic oil revenue fluctuations continue to pressure the informal market. Over the past week, the dollar–naira rate has fluctuated but remained largely within the high-₦1,400s range across both markets. Despite modest appreciation from early-October peaks, traders note that naira stability remains highly sensitive to foreign inflows, oil receipts, and CBN intervention patterns.

What this means:
The naira’s current trading range signals relative short-term stability but underscores lingering structural imbalances in Nigeria’s foreign exchange system. For businesses, the wide gap between official and parallel market rates continues to distort import costs and pricing decisions, while consumers face sustained pressure on goods tied to foreign currency. Investors may view the improved liquidity and easing inflation as positives, yet the persistent market duality suggests confidence in policy consistency and long-term FX reform remains tentative.