Naira Gains Slightly as Forex Market Shows Signs of Stability
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The naira edged up marginally against the dollar on Wednesday, appreciating by 0.16% to close at ₦1,530.52/$ from ₦1,532.93/$ in the previous trading session, according to data from the Central Bank of Nigeria (CBN).
During the day’s trading, the naira fluctuated between a high of ₦1,545/$ and a low of ₦1,500/$, marking a slight improvement from Tuesday’s figures. However, at the parallel market, the exchange rate remained unchanged at ₦1,585/$, according to CardinalStone Research, widening the gap for speculative traders. The spread between the official and parallel market rates narrowed to 3.07% from 3.40% at the start of the week, reflecting a degree of market stabilisation.
Analysts attribute this relative steadiness to ongoing structural reforms and increased foreign exchange inflows. Tilewa Adebajo, CEO of CFG Advisory, argued that Nigeria’s foreign exchange system is evolving in a positive direction, particularly with the introduction of a unified digital platform for currency transactions.
“We really need to change our mindset about the exchange rate,” Adebajo said. “Most people abroad now use apps to transfer money to Nigeria, and these transactions are settled at the official rate. A lot of the overseas inflow is coming through this system, ensuring supply in the market. What remains is for parallel market operators and Bureau De Change agents to adapt.”
Comercio Partners, in an investor note, commended the recent stability of the naira, noting that the currency has largely held within the ₦1,450-₦1,550 range, easing pressure on import costs. However, the firm cautioned that maintaining this stability depends on consistent monetary policies and sustained forex inflows.
“Nigeria’s long-term stability hinges entirely on competitive market dynamics, breaking up monopolies, and ensuring the CBN stays focused,” the report warned. “One policy misstep, and we’re back to square one.”
CardinalStone analysts echoed these concerns, highlighting a potential risk from declining global oil prices, which could affect Nigeria’s forex earnings. Brent crude prices have fallen by 5.5% year-to-date due to expectations of increased global supply and weakening demand.
Meanwhile, the US has ramped up crude production, with the Energy Information Administration raising its 2025 forecast to 13.61 million barrels per day (mbpd), up from 13.55 mbpd. In addition, OPEC+ plans to phase out voluntary production cuts from April, a move that could further depress oil prices.
With oil still a key determinant of Nigeria’s foreign exchange stability, analysts warn that the naira remains exposed to external shocks, despite recent gains in the forex market.
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