The exchange rate between the parallel market and official window narrowed again as the naira traded flat.

The development comes as the foreign exchange inflows surged 71% to $1.31 weekly, driven by foreign portfolio investors (FPIs).

The naira narrows the gap in FX markets

The Nigerian currency has further narrowed the disparity between the two forex market windows to N2 per dollar.

According to data from Nigerian Foreign Exchange Market (NFEM), traders bought $1 for N1,535 on Monday, July 21, 2025, the same rate as Friday, July 18, 2025.

In the parallel segment of the foreign exchange market, also known as the black market, the naira appreciated to N1,533 per dollar, leaving the exchange rate gap of N2 between the two windows.

Analysts express divergent views

Analysts have expressed mixed feelings about the near convergence, stating that while it largely meets the forex reforms of the Nigerian government, the naira is highly devalued.

Osas Igho, a financial analyst, said the current rate is a depreciation and not a true representation of the naira’s value.

“Yes, this meets, to a large extent, the expectations of the Nigerian government regarding FX reforms, but it falls short on the consumer supply and demand side.

“The naira is grossly undervalued, and this is the bane of inflation in Nigeria,” he stated.

However, Janet Ogochukwu, a senior banker and economist, said the development is good for the naira, the economy and Nigerians.

She disclosed that the gap is insignificant and will reduce hoarding and discourage speculation.

“This is the second time in two weeks this is happening, and I think it reflects effective policy implementation by the Central Bank of Nigeria (CBN). Yes, the naira is facing a renewed volatility; it will emerge stronger, especially due to the rise in external reserves and FPI inflows,” she said.

External reserves rise

Last week, Legit.ng reported that Nigeria’s external reserves rose by $422 million to $37.822 billion.

The development came as the CBN injected about $800 million into the FX market amid liquidity crunch.