Nigeria’s currency maintained its footing at the official foreign exchange market on Friday, October 24, even as street traders continued quoting significantly higher rates for cash dollars. The gap between formal and informal channels remains a key concern for analysts monitoring the West African economy.
At the Nigerian Foreign Exchange Market (NFEM), which serves as the primary window for investors and exporters, the US dollar traded near N1,460 to the dollar. This represented modest stability from earlier weekly levels, suggesting that Central Bank of Nigeria interventions may be providing support to the official rate. Corporate bodies and importers with access to formal channels typically transact close to this NFEM benchmark.
But walk into any Lagos street corner where currency dealers operate, and you’ll encounter a different reality entirely. The parallel market, commonly called the black market, saw the greenback changing hands between N1,495 and N1,515 per dollar. Some transactions reportedly occurred at the upper end of this range, placing the informal market average roughly around N1,500.
This persistent spread between official and street rates continues to create a dual economic reality for Nigerians. Businesses operating through legitimate banking channels enjoy better rates, while ordinary citizens seeking cash dollars for travel, remittances, or personal needs face substantially higher costs. The difference can add hundreds of naira to every dollar purchased.
Several factors keep this premium alive. Limited dollar supply through official channels means high cash demand flows naturally toward the parallel market, where liquidity is more readily available. Market sentiment also plays its role, as does varying access to formal foreign exchange windows depending on transaction type and customer profile.
Policy watchers will be monitoring several indicators in coming weeks. Weekly foreign exchange turnover at FMDQ, fresh Central Bank interventions, and global dollar movements all influence local rate dynamics. If official supply increases meaningfully, the NFEM fixing could strengthen or at least hold ground. However, unless retail cash demand subsides, parallel market rates will likely remain elevated.
For now, Nigeria’s currency story remains split between two markets operating at different price levels, with the Central Bank’s monetary policy adjustments serving as the primary stabilizing force for official rates.
