The Nigerian naira weakened further in the parallel market on Thursday, exchanging at N1,621 to the US dollar, marking a sharp decline from the N1,580/$1 rate recorded just a day prior. This represents a N41 drop within 24 hours, intensifying concerns about sustained instability in the country’s foreign exchange (FX) market.
Market surveillance conducted by Nairametrics at Wuse Zone 4, Abuja, confirmed the depreciation, with currency traders attributing the shift to escalating demand pressures amid limited dollar availability.
Although the official exchange rate was reported at N1,644/$1 on Wednesday by the Central Bank of Nigeria (CBN), no updated rate had been released by the CBN by the close of trading on Thursday, leaving the market without timely guidance.
Currency dealers and analysts in the Wuse Zone 4 area pointed to a confluence of factors fueling the ongoing depreciation. These include a resurgence in speculative trading, unmet dollar demand—particularly from importers—and broader confidence issues impacting the FX market.
Speaking to Nairametrics, Alhaji Aminu Gwadabe, President of the Association of Bureau De Change Operators of Nigeria (ABCON), attributed the continued market volatility to both domestic and global economic uncertainties. In his words:
“The volatility, fears, happenings, and shocks in both the local and international markets called for disdain. President Trump’s tariff announcements have sent markets into panic, loss of confidence, revenue losses, and budget reviews.”
Despite CBN’s ongoing efforts to stabilise the market, Gwadabe noted that volatility remained a pressing challenge.
“As usual, the CBN, being a catalytic actor, must continue to ensure stability through timely interventions. However, volatility remains a challenge and needs to be more comprehensively addressed,” he stated.
He further urged the apex bank to enhance its policy tools, particularly to serve the retail end of the FX market more effectively.
“It is therefore necessary for the CBN to reevaluate the efficacy of that Policy transmission mechanisms and expand its to scope to the BDCs retail segment of the market to cater for the needs of the critical retail needs of invisible transactions where the BDCs poses the most potent tool of the CBN policy transmission mechanism.”
Echoing similar sentiments, Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), also cited global developments and speculative tendencies as contributing factors to the naira’s continued woes.
“This is not unconnected to recent policy signals from President Trump and global oil price movements. The market is heavily information-driven, and speculative pressure has spiked following the tariff announcements,” Yusuf said.
“Now that Trump appears to be having second thoughts, we might even see a bit of a breather in the FX market,” he added.
On the ground, traders reported that uncertainty surrounding government reforms and difficulties in accessing official FX channels were exacerbating the situation. One dealer, speaking on condition of anonymity, stated: “The demand today was unusually high, especially from small businesses that can’t access the banks. It’s putting pressure on our supply.”
Interestingly, the gap between the official and parallel exchange rates narrowed slightly on Thursday—N1,644/$1 versus N1,621/$1—a sign of potential convergence, even as volatility lingers.
Analysts caution that unless the CBN reinstates consistent intervention measures or significantly increases FX liquidity, the naira is likely to remain under downward pressure in the near future. The current depreciation trend underscores deeper challenges related to liquidity shortfalls and an entrenched mismatch between demand and supply in Nigeria’s FX ecosystem