FX market rates are exchange rates that differ from the officially given exchange rate set by a government. These Parallel market rates often occur when the official rate bears little resemblance to the actual market conditions.

FX market operators are Nigerians who make a living through money exchange outside the purview of the regulator –the Central Bank of Nigeria (CBN). They speculate and profit from the premium between official and unofficial markets.

The parallel market is global and provides FX for those unable to access FX. However, due to the shortage of FX supply at the official window, the spread between the official and parallel market has continued to widen

The parallel market is thriving in Nigeria, it is because a lot of people have difficulty accessing forex from the official window. These people resort to the parallel market where forex can be sourced easily.

This is why you hear some people argue that the real value of the naira is determined in the parallel market where forces of demand and supply are at play. It’s important to note that the parallel market will always be there as it is a feature of most economies.

Those in need of a small amount of forex may find accessing such funds from banks and even BDCs (the official windows) cumbersome. The parallel market will continue to be patronized as long as it offers people convenience.