As Nigeria continues to strengthen its currency in the face of worldwide economic stressors and a weak dollar, the naira posted an uneven performance across various trading platforms on the 21st of August 2025. In the market for informal and parallel transactions which is where a lot of individuals and companies rely on foreign exchange because of its versatility the naira grew over that of the US dollar. It was reported by traders that it increased to N1,550 dollars on Wednesday. This is an increase over the previous day’s value of N1,555 for a dollar and indicating a modest increase that may ease some of the immediate tensions for travelers and importers dependent on this segment.
However, this shift is in stark contrast to the developments that have occurred within the more tightly controlled Nigerian Foreign Exchange Market, commonly viewed as a reference point in official transaction. In this instance, the naira suffered an unintentional decline, falling in value to N1,537.9 per dollar, down from N1,534.5 per dollar a day prior. Central bank data further explained the change, revealing the rate of exchange rising up to N1,537.99 per dollar. This is equivalent to an increase in the amount of N3.49 worth of value to the currency local in just a few hours.
The divergence between these two markets has resulted an apparent convergence in rates as the gap shrinks down to N17.01 for each dollar Wednesday, compared the gap to N20.5 dollars on Tuesday. This reduction in spread could indicate a better alignment between formal and informal channels, which could lead to greater confidence among investors, and decreasing chances of arbitrage. As Nigeria is still navigating the fiscal reforms as well as external factors such as oil price volatility the daily fluctuations highlight the need for balancing for long-term stability of the currency and to support economic growth in general.
