The naira is likely to remain stable this week as the Central Bank of Nigeria (CBN) continues its intervention in the foreign exchange (FX) market. The bank has introduced measures to control fluctuations and ensure liquidity.
CBN’s Latest Directive to BDCs
To support stability, the CBN has directed Bureau De Change (BDC) operators to buy $25,000 weekly from authorized dealers at the Nigerian Foreign Exchange Market (NFEM) rates.
In a circular signed by W. J. Kanya, Acting Director of the Trade and Exchange Department, the CBN reaffirmed its commitment to regulating FX access. This directive follows a previous circular issued on December 19, 2024. The new guideline enforces a $25,000 cap per BDC purchase each week.
Naira’s Performance in February
On a monthly basis, the naira remained stable. The dollar was quoted at N1,500 on the last trading day of February 2025, compared to N1,499 at the start of the month, according to CBN data.
At the parallel market, also known as the black market, the naira appreciated by N94. It traded at N1,505 per dollar on February 28, up from N1,599 at the beginning of the month. This marked a 6.2% gain, according to reports from street traders and online tracking platforms.
Analysts’ Outlook for March
Market analysts at Afrinvest Securities Limited expect the naira to maintain its positive trend in March. They predict that CBN’s sustained dollar supply to BDCs and Deposit Money Banks (DMBs) will prevent sharp declines, provided there are no sudden market disruptions.
Naira’s Performance Against Other Currencies
Against the euro, the naira weakened by N27.31 in one month. It closed at N1,552.93 per euro on February 28, marking a 1.8% decline from N1,525.62 recorded at the start of the month, according to CBN data.
However, on a day-to-day basis, the naira strengthened against the euro. It gained N70, trading at N1,500 per euro on February 28, compared to N1,570 the previous day in the black market.
The naira also depreciated against the British pound by N42.53 or 2.3% in the official FX market. The pound was quoted at N1,838.15 at the end of February, compared to N1,880.68 at the start of the month.
At the black market, the naira appreciated against the pound. It gained 2.6% day-on-day, strengthening to N1,850 per pound on February 28 from N1,900 the previous day.
For the Canadian dollar, the naira closed at N1,059 on February 28 in the black market, the same rate as the previous day.
Nigeria’s External Reserves Drop
Nigeria’s external reserves fell by $1.18 billion in February, marking a 2.98% decline. Reserves stood at $38.41 billion on February 28, down from $39.59 billion at the start of the month, according to CBN data.
A report by Afrinvest linked the drop to CBN’s efforts to stabilize the naira. The bank resumed payments for a verified portion of the $7 billion FX backlog, contributing to the decline in reserves.
In the official market, the naira depreciated by 1.7% against the US dollar in February, closing at N1,500.15 per dollar. Meanwhile, in the parallel market, it appreciated by 8.5%, strengthening to N1,490 per dollar.
Overall, CBN’s interventions continue to shape the naira’s performance, balancing FX supply and demand to ensure stability.
