By Merciful Omoba
The Nigerian Naira commenced the new trading week with a slight depreciation against the United States Dollar in the black market, reflecting sustained pressure as demand for foreign exchange continues to outstrip supply in the informal currency market.
As of Monday, July 28, 2025, currency traders across major hubs in Lagos, Abuja, and Kano reported the black market exchange rate for the Dollar to Naira as:
- Buying Rate: ₦1,530 per $1
- Selling Rate: ₦1,540 per $1
This ₦10 margin remains consistent with recent market trends, highlighting ongoing liquidity challenges despite various regulatory interventions by the Central Bank of Nigeria (CBN). For comparison, the CBN’s official window is reportedly trading around ₦1,510 to ₦1,520 per dollar.
Many individuals and small businesses continue to rely heavily on the black market due to limited accessibility to foreign exchange at the official rate, often citing stringent documentation requirements and limited allocations. This gap between the official and parallel markets continues to funnel most Nigerians towards the latter for faster and more flexible transactions.
Why the Black Market Remains Crucial
The persistence of the black market as a dominant source of retail forex in Nigeria is attributed to several factors:
- Restricted Dollar Access: Banks and licensed dealers are often unable to meet the overwhelming demand for foreign currency.
- Import Dependence: Nigeria’s heavy reliance on imports sustains a daily, high demand for dollars.
- Inflation & Devaluation Hedge: Nigerians increasingly prefer to hold dollars as a hedge against the Naira’s persistent depreciation and soaring inflation.
- Diaspora Remittances: Informal remittance channels often offer more favorable rates compared to official banking routes.
- Speculation & Hoarding: Some traders engage in speculation, holding back dollars in anticipation of further Naira depreciation.
These combined factors ensure that the Dollar to Naira black market rate remains a critical indicator of Nigeria’s currency reality. Analysts predict that the Naira may remain under pressure this week if there isn’t a significant improvement in dollar supply through increased oil earnings, diaspora inflows, or direct CBN interventions. The parallel market is therefore expected to remain the benchmark for most individuals and businesses seeking foreign exchange in the short term.
