The naira recorded a mixed trading in February 2025, gaining in the unofficial market also known as the black market and depreciation in the CBN's official market.
This is according to data from Afrinvest in its monthly market report released over the weekend.
The report noted that the naira appreciated by 8.5% month-on-month against the US dollar in the parallel forex market, closing at an exchange rate of N1,490 per dollar from the average rate of N1,600.
Meanwhile, in the official market, it closed the month at N1,500 per dollar, reflecting a modest 1.7% decline when compared to the January closing rate.
Analysts by Afrivest attributed the fluctuations in the foreign exchange markets to various factors, including efforts by the Central Bank of Nigeria (CBN) to stabilise the currency.
Part of the report reads:
"This decline can be linked to CBN's efforts to stabilise the naira, particularly through the resumption of payments for the verified portion of the outstanding $7.0bn foreign exchange backlog."
The analysts also went on to project that it expects the naira to maintain positive performance.
They added:
"In March, we anticipate the naira will maintain its positive performance across forex segments, supported by the CBN's continued USD supply to BDCs and DMBs, provided there are no adverse market shocks."
Threats to naira
Similarly, Cowry Asset Research highlighted ongoing challenges such as Nigeria's mounting debt burden, persistent inflation rates, and sustained decline in foreign reserves.
These factors were identified as potential threats to the naira's stability and the effectiveness of ongoing forex reforms.
"The sustained pressure on oil prices resulted in lower dollar inflows into Nigeria's economy, directly impacting the nation's foreign exchange reserves. As a result, forex reserves declined by $240m, or 0.61 per cent week-on-week, reflecting weaker oil earnings and highlighting the persistent foreign exchange liquidity challenges facing the country.
"At the official window, the local currency appreciated marginally by 93 kobo against the greenback, closing at N1,500.15 per dollar. Meanwhile, at the parallel market, the naira gained N5 to settle at an average of N1,490 per dollar as demand pressure eased slightly."
Nigeria's foreign reserves drop
According to an earlier report by Torizone, the Central Bank of Nigeria (CBN) revealed that the naira closed in the Nigerian Autonomous Foreign Exchange Market (NAFEM) at N1,500.73/$1. Friday's exchange rate is a loss of 0.12% or N1.73 when compared to the N1,499.00/$1 reported on Thursday.
Comments