At the end of trading on Wednesday, the Nigerian naira saw a slight appreciation of 0.16%, closing at 1,530.52 per US dollar, compared to 1,532.93 in the previous session, according to data released by the Central Bank of Nigeria (CBN). During the day, the currency fluctuated between a high of 1,545/$ and a low of 1,500/$, both rates lower than those recorded on Tuesday.
In the parallel market, the naira remained steady at 1,585/$, as reported by CardinalStone Research. This stability has reduced the gap between the official and parallel market rates to approximately 3.07%, down from 3.40% earlier in the week. Despite minor depreciation, analysts believe the market is stabilizing, thanks to structural reforms and increased foreign exchange inflows.
Tilewa Adebajo, CEO of CFG Advisory, shared her insights with The Punch, emphasizing the need for a shift in mindset regarding exchange rates. She highlighted the introduction of a unified portal for currency transactions as a key factor driving stability. “Most people abroad now use apps to transfer money to Nigeria, which provides them with the official rate and ensures seamless settlements,” she explained. Adebajo noted that while overseas inflows are increasingly channeled through this platform, parallel market operators and Bureau de Change agents are yet to fully adopt the system. “Once they do, we’ll achieve true price discovery. The CBN is no longer the primary supplier of dollars, marking a significant evolution in our forex system,” she added.
Investment firm Comercio Partners commended the naira’s recent stability in an investor note, attributing it to the currency’s ability to hold within the N1,450-1,550 range against the dollar. This has helped curb rising import costs. However, the firm cautioned that long-term stability depends on consistent policies and sustained forex inflows. “Nigeria’s stability hinges on competitive market dynamics, breaking monopolies, and the CBN maintaining focus. Any policy misstep could reverse progress,” the note stated.
CardinalStone analysts echoed this sentiment, pointing out that the naira’s stability since the start of the year has been supported by CBN interventions, a positive current account balance, and increased foreign inflows. However, they warned of potential risks from declining global crude oil prices, which could threaten forex stability and fuel inflation.
Brent crude prices have fallen by 5.5% year-to-date, driven by expectations of increased global supply, policy changes, and weakening demand. The U.S. Energy Information Administration has revised its 2025 crude production forecast upward to 13.61 million barrels per day (mbpd), up from 13.55 mbpd, while OPEC+ plans to gradually phase out 2.20 mbpd in voluntary production cuts starting April 2025. These developments could further pressure oil prices, posing challenges for Nigeria’s forex stability.
