Naira Maintains Stability Amid Economic Pressure
The naira has remained stable at N1,500 per dollar in the black market, despite a drop in Nigeria’s external reserves. In the official market, the exchange rate closed almost unchanged, showing little movement despite ongoing economic challenges.
Since the start of the year, the naira has strengthened by N95 or 6.3% in the black market. At the beginning of the month, the exchange rate stood at N1,595 per dollar but later settled at N1,500 by Thursday.
Naira’s Performance Against Other Currencies
In the black market, the naira also traded at:
- N1,570 per euro
- N1,900 per pound
- N1,059 per Canadian dollar
Meanwhile, in the official market, the naira closed at N1,496 per dollar, slightly lower than N1,495 from the previous day, according to data from the Central Bank of Nigeria (CBN).
Fluctuations in the Official Market
On Thursday, authorised dealers quoted the highest exchange rate at N1,500.50, slightly lower than N1,503 on Wednesday. The lowest rate recorded was N1,496, just a notch below N1,495 from the previous session at the Nigerian Foreign Exchange Market (NFEM).
Declining External Reserves Raise Concerns
Nigeria’s external reserves have dropped to $38.49 billion as of February 26, 2025. This represents a decline of $2.39 billion since the beginning of the year, when reserves stood at $40.88 billion.
Despite the introduction of the CBN’s electronic forex trading platform, analysts suggest the naira may not appreciate beyond N1,500 per dollar.
Experts Predict Limited Appreciation
Aminu Gwadabe, President of the Association of Bureaux De Change Operators of Nigeria (ABCON), had earlier predicted that while the naira could strengthen further, it might not rise beyond N1,500 per dollar.
“It is achievable considering the improved investor confidence, but I believe further gains may not extend beyond N1,500/$,” he said in December 2024.
CBN’s Efforts to Enhance Market Transparency
In November 2024, the CBN introduced new guidelines to improve transparency in the interbank forex trading system. Through the Electronic Foreign Exchange Matching System (EFEMS), the central bank:
- Set the minimum tradable amount at $100,000
- Established incremental trading clip sizes of $50,000
These measures were designed to enhance efficiency and confidence in Nigeria’s FX market.
