Naira Holds Steady Against Dollar Across Official, Parallel Markets

Naira Holds Steady Against Dollar Across Official, Parallel Markets

The Nigerian currency traded within a relatively stable range against the United States dollar on Tuesday, May 5, 2026, across both the official and parallel foreign exchange markets, reflecting cautious optimism among traders and ongoing interventions by monetary authorities.

Data from the Central Bank of Nigeria (CBN) showed that the official Nigerian Foreign Exchange Market (NFEM) rate hovered around ₦1,374 per dollar, with intraday trading bands ranging between approximately ₦1,362 and ₦1,378. The relatively narrow spread suggests reduced volatility compared to previous weeks when the naira experienced sharper fluctuations.

In the parallel market, commonly referred to as the black market, Bureau De Change (BDC) operators in Lagos and Abuja quoted the dollar at about ₦1,385 for buying and ₦1,400 for selling, depending on transaction size and location. This places the gap between the official and parallel market rates at under ₦30, indicating a moderate premium and some convergence between both segments of the market.

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Market analysts attribute the relative stability to sustained efforts by the CBN to improve dollar liquidity in the official window, including periodic interventions and policy adjustments aimed at boosting confidence in the formal forex market. Increased transparency in FX transactions and reforms targeted at clearing backlogs of unmet dollar demand have also contributed to improved sentiment.

However, demand pressure remains a key factor influencing the market. Importers, manufacturers, students paying foreign tuition, and international travelers continue to seek foreign exchange, often turning to the parallel market due to accessibility constraints within the banking system.

Traders noted that while supply conditions have improved slightly, liquidity is still not sufficient to fully meet demand, which keeps pressure on the naira and sustains activity in the informal market.

Looking ahead, analysts say the direction of the naira in the coming days will depend on several macroeconomic indicators. These include global crude oil prices—Nigeria’s primary source of foreign exchange earnings—foreign reserve levels, and the consistency of monetary policy measures by the CBN.

There is also close attention on capital inflows, particularly from foreign portfolio investors, whose participation in Nigeria’s financial markets could strengthen dollar supply and support exchange rate stability.

Despite the current calm, experts warn that the naira remains vulnerable to external shocks and domestic demand pressures, meaning sustained policy discipline and improved forex inflows will be critical to maintaining stability in the weeks ahead.

Naira Holds Steady Against Dollar Across Official, Parallel Markets