The exchange rate between the U.S. dollar and the Nigerian naira fluctuates depending on the market.
As of March 5, 2025, the official exchange rate in the Central Bank of Nigeria (CBN) window stands at approximately ₦1,497.66 per dollar.
Black Market (Parallel Market) Exchange Rate
In the unofficial market, also known as the black market, exchange rates tend to be higher due to demand and supply dynamics. Reports indicate that on March 4, 2025, the dollar was traded at approximately ₦1,520 per dollar in Lagos and other major financial hubs. However, it is important to note that rates in the parallel market vary based on location, negotiation, and other market forces.
Key Takeaways:
- CBN Official Rate: Around ₦1,497.66 per $1
- Parallel Market Rate: Approximately ₦1,520 per $1
- Buying and Selling Prices in the Black Market: Buyers purchase at ₦1,505 while sellers exchange at ₦1,515
Regulatory Advisory on Forex Transactions
The Central Bank of Nigeria (CBN) does not recognize or regulate the black market. It advises individuals and businesses seeking foreign exchange to obtain it through official channels, such as banks and licensed forex dealers, to ensure compliance with financial regulations.
Factors Influencing Naira’s Exchange Rate
Several economic and policy-related factors impact the value of the naira against the dollar, including:
- Foreign Reserves: The availability of foreign currency reserves affects liquidity in the forex market.
- Inflation Rate: A high inflation rate weakens the naira’s purchasing power, leading to depreciation.
- Monetary Policy Decisions: CBN’s interventions, such as interest rate adjustments and forex policies, influence the exchange rate.
- Dollar Demand from Importers: A surge in demand for dollars by businesses and individuals increases pressure on the naira.
Market Outlook
The exchange rate is expected to remain volatile in the short term due to ongoing economic uncertainties. Analysts suggest that stability could be achieved through improved forex inflows, increased foreign direct investment, and strategic policy interventions by the government and the CBN.
Since forex rates fluctuate daily, individuals and businesses engaging in currency exchange are advised to verify the latest rates from reliable sources before making transactions.
