The Nigerian naira strengthened against the United States dollar in the parallel market on Tuesday, appreciating to ₦1,395 per dollar, up from ₦1,405 per dollar last week.
The increase marks a ₦10 gain for the naira in the unofficial market, where forex is traded outside the regulated Central Bank of Nigeria (CBN) window.
Naira gains ground in parallel market
In recent months, the naira has faced significant pressure in both the official and parallel markets due to limited forex supply and strong demand from importers and other users.
However, Tuesday's appreciation provides some respite for the embattled currency, which had traded as low as ₦1,410 per dollar in the parallel market in recent times.
Improved forex liquidity supports naira
Traders attributed the naira's gain to an improved supply of forex in the parallel market, as some users who had previously hoarded dollars released them for sale, boosting liquidity.
Nevertheless, the naira continues to trade at a wide premium in the parallel market compared to the official CBN rate of around ₦460 per dollar. The gap highlights the forex supply challenges still confronting the economy.
