The Nigerian foreign exchange market is once again under pressure as mid-year import demand drives a fresh wave of dollar purchases, increasing strain on liquidity and pushing more businesses toward the parallel market.

The latest surge is being driven by seasonal procurement activity, as manufacturers and wholesalers rush to secure foreign exchange for the importation of raw materials and finished goods ahead of increased consumer demand in the second half of the year.

While the official market has remained relatively stable within a narrow trading band supported by Central Bank of Nigeria (CBN) interventions, market participants say underlying demand-supply imbalances continue to widen. The official exchange rate is holding steady around ₦1,360 to ₦1,364 per dollar, but the parallel market has firmed up between ₦1,395 and ₦1,405 as immediate demand outpaces available supply in formal channels.

Traders and analysts note that although the gap between both markets is narrower than in previous years, the persistent difficulty in accessing timely foreign exchange at official windows is forcing many corporate buyers to turn to the parallel market despite higher costs. This is particularly evident among import-dependent businesses that cannot afford delays in clearing goods or processing payments for overseas suppliers.

Financial analysts say the pressure is typical of Nigeria’s mid-year import cycle, when demand for foreign currency rises sharply due to bulk purchasing for production and retail restocking. They add that although official market turnover has improved over the past year, often ranging between $400 million and $600 million daily, these inflows are frequently insufficient to fully absorb concentrated seasonal demand.

The Central Bank of Nigeria has continued implementing reforms aimed at stabilising the foreign exchange system, including updates to its FX management framework and adjustments to import-related payment rules. Recent policy changes have increased allowable advance payments for imports from 15 percent to 30 percent and expanded the use of electronic processing for foreign exchange transactions, including travel-related payments, in an effort to improve transparency and efficiency.

However, businesses—particularly small and medium-scale importers—say the reforms have yet to significantly ease immediate cost pressures. The higher cost of dollars in the parallel market is already feeding into increased landed costs for goods, raising concerns that consumer prices could rise further if supply constraints persist.

Market observers say the near-term outlook for the naira will depend on the Central Bank’s ability to sustain interventions, maintain investor confidence, and benefit from steady foreign exchange inflows, particularly from oil revenue. Until then, they warn that seasonal import demand will continue to be a recurring source of volatility in Nigeria’s foreign exchange market.