The naira strengthened against the US dollar in the parallel foreign exchange market on Tuesday, appreciating to N1,400 per dollar from N1,407 recorded the previous day.
The latest movement represents an N7 gain for the local currency amid ongoing developments in Nigeria’s foreign exchange market.
However, the naira moved in the opposite direction at the Nigerian Foreign Exchange Market (NFEM), where it weakened marginally to N1,365 per dollar from N1,364 on Monday, according to data from the Central Bank of Nigeria (CBN).
The divergent movements narrowed the gap between the parallel and official exchange rates to N35 per dollar, compared with N43 recorded a day earlier.
The narrowing spread suggests a relatively closer alignment between the two market segments, a development that could support improved price discovery and reduce incentives for foreign exchange transactions outside the formal market.
Trading activity at the NFEM also declined sharply, with interbank turnover falling to $102.95 million from $39.6 million recorded in the previous session, according to the report.
The latest exchange-rate movement comes amid sustained efforts by the CBN to improve liquidity and deepen transparency in the foreign exchange market.
Market watchers continue to monitor dollar supply, foreign exchange inflows and demand pressures as key factors that could determine the naira’s direction in the coming days.
The performance of the local currency also remains closely tied to developments in Nigeria’s external reserves, crude oil earnings, portfolio investment inflows and the CBN’s foreign exchange management policies.
