Nigeria's foreign exchange landscape is facing renewed turbulence, marked by a significant and widening chasm between the official and parallel market rates for the US dollar. This development, observed on Wednesday, December 4, 2025, signals persistent underlying pressures despite recent measures aimed at stabilizing the national currency.
Official Window Sees Marginal Gain Amidst Market Tension
Data from the Nigerian Foreign Exchange Market (NFEM) revealed a slight appreciation for the naira at the official window. The currency strengthened by N3.04 to close at N1,445.39 per US dollar. Financial analysts link this minor gain to improved dollar liquidity and more assertive demand management strategies implemented by the Central Bank of Nigeria (CBN).
This firming of the official rate represents a temporary reversal of earlier weekly losses, suggesting that regulatory interventions are providing a degree of guidance. However, this stability appears confined to the formal market segment.
Parallel Market Tells a Different Story as Naira Weakens
In stark contrast, the informal parallel market experienced a notable depreciation. Here, the naira lost value, weakening by N5 to trade at N1,470 per dollar. This decline has dramatically expanded the gap between the two primary forex windows.
The spread, which measures the percentage difference between the official and black-market rates, widened to 1.70 percent from 1.14 percent recorded just a day earlier. Currency traders operating in the parallel segment report that demand from businesses and individuals seeking rapid access to foreign currency remains high, sustaining pressure on the informal rate.
Rising Reserves Offer a Glimmer of Economic Hope
Amidst the forex market volatility, a key positive indicator emerges from Nigeria's external reserves. The reserves have climbed to $44.67 billion, reflecting a substantial 9.3 percent increase since the beginning of the year.
Economists suggest that this strengthened reserve position could serve as a crucial buffer to moderate currency fluctuations in the near term, provided global economic conditions remain relatively stable. The consensus among market watchers is that the naira's trajectory in the coming days will be shaped more by genuine demand and supply dynamics rather than speculative activity.
In related developments, the CBN continued its active intervention in the market, supplying $36.60 million to authorized dealers and banks on Tuesday. This follows a similar injection of $40 million the previous week, underscoring the apex bank's ongoing efforts to manage liquidity and steady the fast-moving forex market.
