Naira stable as spread narrows to ₦40

Naira held steady at ₦1,364.83 per dollar in the official market, with the parallel market gap narrowing to ₦40 amid improved FX liquidity.

The Naira maintained relative stability in the official Nigerian Foreign Exchange Market (NFEM), trading at ₦1,364.83 per dollar while parallel market rates hovered around ₦1,405. Financial analysts noted that the moderate ₦40 spread reflects improved foreign exchange liquidity, steady export inflows, and balanced demand from importers.

The narrowing of the spread to ₦40 is a positive sign for the currency. The gap had widened to more than ₦100 at times in the past, reflecting dollar scarcity and the premium demanded in the parallel market. The current stability suggests that the CBN’s liquidity interventions are working. For a trader in Lagos, the ₦40 spread means that the cost of importing goods has become more predictable, reducing the uncertainty that has plagued businesses.

This echoes the 2022 parallel market premium, which also narrowed when the CBN intervened. The mechanism was different then, but the result was the same: a period of relative stability.

The winners: importers, who benefit from a more stable exchange rate; and the CBN, which has managed liquidity effectively. The losers: speculators, who thrive on volatility; and the Nigerian public, who must hope the stability is sustained.

Bottom Line: The naira is stable, and the spread is narrow. The question is whether the stability will hold or the pressures will return.