Naira Exchange Rate: Parallel Market Gap Widens as Naira Drops to N1,620 per Dollar

The Nigerian naira faces renewed pressure, dropping to N1,620 against the U.S. dollar in the parallel market as of June 4, 2025.

This latest depreciation expands the gap between the parallel market and the official exchange rate, which is causing ongoing instability in Nigeria’s foreign exchange sector, causing concerns among businesses and economic analysts.

Current Situation: Parallel vs. Official Market

According to the latest data from Vanguard, the naira fell by N10, moving from N1,610 per dollar to N1,620 in the parallel market within one day. The parallel market is crucial for individuals and businesses unable to obtain foreign currency from official channels, serving as a barometer of actual market conditions.

Conversely, the official market (Nigerian Foreign Exchange Market, NFEM) recorded a slight improvement, with the naira appreciating marginally to N1,579 per dollar from N1,580. Consequently, the gap between the parallel and official market exchange rates widened, increasing from N30 to N41 in a single trading day.

Expert Insights and Recommendations

Financial analysts stress the urgent need for effective forex management reforms. The Central Bank of Nigeria (CBN) highlights the importance of harmonising exchange rates to reduce uncertainty and speculation.

Dr. Bola Ademola, a prominent Lagos-based financial analyst, recommends, “Clear and consistent forex policies from the CBN are vital. Transparency and stability will reduce speculation and improve investor confidence significantly.”