The naira recovered on the official foreign exchange market Wednesday, reversing the previous session’s losses, even as the currency weakened slightly on the parallel market.
Data from the Central Bank of Nigeria showed the naira appreciated to N1,360.58 per dollar at the official window, strengthening by N4.31 from Tuesday’s close of N1,364.89. The gain erased the depreciation recorded a day earlier, when the local unit had slipped on the same platform.
Activity on the parallel market told a different story. The naira dipped marginally to N1,430 per dollar, down N1 from the N1,429 quoted on Tuesday. The divergence left Traders navigating mixed signals across the two segments of the foreign exchange market.
The split performance coincided with a continued rise in the country’s external reserves, which climbed to $52.17 billion. The reserve buildup has provided a buffer for the central bank as it manages liquidity and defends the currency through regular interventions.
Market analysts say the official market’s rebound reflects improved dollar supply, likely supported by central bank sales and inflow from export proceeds. Meanwhile, persistent demand pressure on the parallel market continues to keep rates elevated, widening the gap between the two windows.
The spread between official and parallel rates now stands at roughly N69, a level that sustains arbitrage incentives and complicates price discovery for businesses and investors.
Tuesday’s session had seen the reverse dynamic: the naira weakened on the official market but inched a marginal gain on the street. The seesaw pattern underscores the fragility of current equilibrium and the sensitivity of both markets to daily liquidity flows.
Policy watchers are monitoring whether the reserve accumulation can translate into sustained stability. The central bank has signaled its commitment to a unified, market-determined exchange rate, but structural gaps — including limited non-oil export earnings and portfolio outflow risks — continue to test that objective.
Next week’s auction results and reserve data will offer clearer direction on whether Wednesday’s official market gain marks the start of a trend or a technical correction in a still-volatile environment.
