Naira shows cautious stability as official and street rates narrow gap
The Nigerian naira traded with a mildly steady tone on Thursday, October 2, 2025, as the gap between the official exchange rate and the parallel market rate remained modest, reflecting improved dollar inflows and continued demand from importers and travellers.
Key Exchange Rates
- Official NFEM rate: ₦1,483 per US$1
- Parallel market rate: ₦1,490 per US$1
The spread between the two markets stood at about ₦7, a significant improvement compared with the wider double-digit gaps seen earlier this year.
Market Developments
The official benchmark at the Nigerian Foreign Exchange Market (NFEM) — derived from interbank trades and published by regulators — hovered near ₦1,483/$1, only slightly weaker than the previous session.
Traders noted that the official window remains influenced by liquidity management by the Central Bank of Nigeria (CBN) and the pace of dollar inflows through the electronic trading system.
In the informal (parallel) market, dealers quoted the naira at around ₦1,490/$1. This level points to a gradual convergence between the official and street exchange rates, although the informal market still serves customers who cannot access the formal banking channels.
Drivers Behind the Trend
Market operators cited a combination of factors supporting the naira this week:
- Modest foreign currency inflows, including diaspora remittances and receipts from exports and imports.
- CBN interventions that have helped reduce sharp swings in intraday trading.
- A generally steady US dollar on the global stage after recent volatility.
Dealers said most corporate transactions continue to pass through the official window, while individuals such as students and travellers remain the main drivers of demand in the street market.
Analysts’ Perspective
Currency analysts cautioned that the current stability is tentative. They argue that lasting calm in the market will depend on:
- Sustained foreign exchange inflows
- Stronger liquidity in the NFEM
- Continued clear policy signals from monetary authorities
“The narrowing of the gap is encouraging, but it needs to be supported by consistent dollar supply and deeper reforms to keep volatility under control,” one Lagos-based FX trader said.
Short-Term Outlook
Market watchers expect the dollar to trade within a relatively narrow band over the next several days:
- ₦1,480 – ₦1,495/$1 in the official NFEM window
- ₦1,485 – ₦1,500/$1 in the parallel market
These projections hinge on stable supply conditions and no sudden surge in demand.
Bottom Line
The naira’s steadiness on October 2 reflects a fragile but improving balance between demand and supply.
Further progress toward a more unified exchange rate will likely require consistent inflows, deeper liquidity, and predictable policy interventions by the central bank.
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