Naira Gains Against Dollar in Black Market, NAFEM, Sept 1 – Economi Confidential

The naira strengthened modestly against the US dollar on Monday, September 1, posting improvements in both the parallel (black) market and the official Nigerian Foreign Exchange Market (NAFEM). The movement reflects a brief respite for the local currency amid persistent foreign exchange pressures.

Key numbers at a glance

• Parallel market (Abuja): ₦1,530/$1 for buying and ₦1,540/$1 for selling, improving from Friday’s ₦1,550/$1.
• Official window (NAFEM): ₦1,531/$1, unchanged from Friday’s close.

Parallel market update

Currency dealers reported firmer pricing in the cash market, with the naira gaining roughly ₦10 against the dollar compared to the previous session. The improvement signals slightly better dollar liquidity on the day and some easing of speculative pressure, though traders cautioned that flows remain uneven and sensitive to policy headlines.

Official market (NAFEM)

At NAFEM, the naira held steady at ₦1,531/$1. The stability suggests balanced demand and supply during the session, even as underlying market dynamics remain fragile. While the official rate showed no change, the parallel market’s modest gain narrowed the premium between the two windows.

Market context

Despite Monday’s improvement, Nigeria’s FX market continues to navigate tight dollar supply, lingering speculative demand, and uncertainty around the policy path. The premium between official and parallel market rates—though slightly narrower—remains an important gauge of stress in the system. Sustained convergence typically requires deeper and more consistent inflows alongside credible, well-communicated policy measures.

What to watch

• FX supply and liquidity: Oil receipts, remittance inflows, portfolio flows, and central bank interventions will be pivotal to near-term stability.
• Policy signals: Clarity on exchange rate management, market reforms, and measures to curb speculation can shape sentiment and pricing.
• Macro conditions: Inflation trends and interest rate decisions will influence investor appetite and the naira’s trajectory.

Outlook

Analysts note that without broader structural reforms and consistent dollar inflows, the naira may remain prone to bouts of volatility. Monday’s gains are a welcome development, but lasting stability will likely depend on continued policy credibility, improved FX liquidity, and stronger export and investment inflows.