The naira strengthened to trade between N1,425 and N1,430 per dollar at Nigeria’s parallel market following the Central Bank of Nigeria’s (CBN) renewed directive allowing Bureau De Change (BDC) operators to sell foreign exchange. Analysts say this move is already narrowing the gap between official and open market rates, providing hope for more stable currency trading.
Aminu Gwadebe, president of the Association of Bureau De Change Operators of Nigeria, described the policy change as a major boost for retail foreign exchange. Speaking to The PUNCH, he highlighted early signs of improved liquidity and stability, noting that the difference between official and parallel market rates has dropped from as high as N84 per dollar to around N30–N40. “The dollar is falling in the parallel market because liquidity is improving and confidence is returning,” he said.
Under the new circular issued by the CBN, BDCs can access up to $150,000 weekly through authorised dealer banks, reintegrating them into the formal foreign exchange supply chain. Dr. Musa Nakorji, CBN Director of Trade and Exchange, said the measure aims to meet legitimate retail FX needs and enhance overall market liquidity.
Economist Ayo Teriba highlighted that this development is part of broader reforms driving macroeconomic gains. Nigeria’s net external reserves have grown from $24bn to $30bn in the past year, supporting naira appreciation. Teriba added that increased liquidity could moderate inflation, restore purchasing power, and boost capital markets, with potential for lower interest rates if current trends continue.
Market analysts note that the narrowing spread between official and parallel rates reduces arbitrage opportunities and improves price discovery. The CBN has also imposed strict transparency rules for BDCs, requiring timely electronic reporting and limiting cash settlements to 25% of each transaction. These measures, experts say, further strengthen confidence in Nigeria’s FX market.
source: punch