Market News

…currency hits three-year high of N1,345 in black market

The naira posted its strongest convergence level in two years on Thursday as the gap between the official and parallel markets narrowed to 0.29 percent, following a rally that pushed the local currency to a three-year high of N1,345 per dollar in the black market.

Data from street traders showed the naira strengthened by N25 or 1.86 percent from N1,370 per dollar recorded on Wednesday in the parallel market. At its peak performance on Thursday, the dollar was quoted at N1,345. The last time the black market rate traded around N1,310 was in October 2023, according to data compiled by BusinessDay.

At the Nigerian Foreign Exchange Market (NFEM) window, the currency weakened slightly. The dollar was quoted at N1,341.35 on Thursday, reflecting a depreciation of N3.24 or 0.24 percent from N1,338.11 recorded the previous day, based on figures published by the Central Bank of Nigeria.

The latest movement closed the gap between the official and parallel markets to about N4 on Thursday, a sharp improvement from the N92 spread recorded last week. The FX market last witnessed full convergence on July 4, 2024, when the naira traded at N1,520 per dollar in both segments.

Market participants attributed the sharp appreciation in the parallel market to increased dollar supply from speculators who began offloading their holdings after the apex bank reopened access to the official FX window for Bureau De Change operators. 

Nigeria’s external reserves, which provide the central bank with firepower to support the currency, continued their steady climb, rising to $48.50 billion as of February 17, 2026, according to data from the apex bank.

Taiwo Ebenezer, South-West chairman of the Association of Bureaux De Change Operators of Nigeria (ABCON), said the naira’s appreciation followed the announcement that BDCs would resume participation at the NFEM window as directed by the Central Bank.

Despite the renewed optimism, BDC operators have yet to commence dollar purchases from commercial banks, one week after the reopening of the market to them.

In a circular signed by Musa Narkoji, director of the Trade and Exchange Department, the apex bank authorised licensed BDCs to purchase foreign exchange from the NFEM through authorised dealer banks at prevailing market rates. The move is aimed at boosting liquidity in the retail segment and meeting legitimate demand.

Under the guidelines, authorised dealer banks are required to complete all Know-Your-Customer procedures and due diligence checks for BDC clients in line with regulatory standards and internal risk frameworks. Upon satisfactory documentation, banks may sell foreign exchange in accordance with extant BDC guidelines, subject to a maximum of $150,000 per week per BDC.

Licensed BDCs must submit timely and accurate electronic returns to the regulator, while any unutilised foreign exchange purchased from the NFEM must be resold into the market within 24 hours, as operators are prohibited from holding open positions.

Aminu Gwadabe, president of ABCON, described the clarification allowing BDCs access to the NFEM through deposit money banks as highly commendable and a demonstration of the CBN’s commitment to financial inclusion and liquidity enhancement at the retail end of the market.

“On behalf of our members, we thank the CBN management for their clarity, support and inclusiveness,” he said. “The new circular will positively impact the stability of our local currency and address the persistent margin between the NFEM rate and the unregulated market.”

Gwadabe added that the directive would increase dollar liquidity, improve price discovery, reduce speculative activities and boost investor confidence in the sub-sector and the broader financial industry

He urge members to adhere strictly to prudential and anti-money laundering and combating the financing of terrorism obligations, noting that BDCs remain a critical transmission mechanism for the CBN’s foreign exchange policy.

“We are delighted with this positive development and congratulate all successful BDCs nationwide,” he said.