The Naira made notable gains in February 2025, concluding the month with an 8.5.
According to the Afrinvest Monthly Market Report, Nigeria’s foreign reserves experienced a 3.2% decline month-on-month, standing at 38.46 billion as of Thursday. Analysts attribute this dip to the Central Bank of Nigeria’s (CBN) interventions aimed at stabilizing the Naira, including the resumption of payments to address part of the 7.0 billion foreign exchange backlog.
Looking ahead, experts predict that the Naira will continue to show strength in March, bolstered by the CBN’s efforts to maintain a consistent supply of dollars to Bureau De Change (BDC) operators and Deposit Money Banks (DMBs). They cautioned that this outlook remains contingent on avoiding any unforeseen market disruptions.
Despite these challenges, the Naira demonstrated mild strength, maintaining a steady position around the N1,500 mark across both market segments. A report from Cowry Asset Research noted that the benchmark Nigerian crude, Bonny Light, fell by 3.2%, settling at 75.88 per barrel due to reduced global demand. This dip in oil prices put pressure on Nigeria’s foreign reserves, contributing to a drop of 240 million, or 0.61% week-on-week. The continued weak performance of oil prices highlights the challenges Nigeria faces in bolstering its foreign exchange liquidity.
At the official window, the Naira saw a slight gain of 93 kobo against the dollar, closing at N1,500.15 per dollar, while the parallel market reflected a minor improvement, with the Naira gaining N5 to settle at N1,490/$.
Looking forward, experts anticipate a continued struggle for stability in the foreign exchange market. With the CBN’s ongoing efforts to bolster the Naira, including tightening liquidity and enhancing forex supply mechanisms, there may be room for further appreciation of the Naira against the US dollar in the coming week.
However, experts have also pointed to several ongoing challenges that could hinder these gains, including rising national debt, a steady decline in foreign reserves, and persistent inflation. These issues remain significant factors that could undermine the effects of foreign exchange reforms and impact the Naira’s long-term stability.
