Naira Strengthens Below N1,500/USD for First Time in Seven Months, Analysts Predict Stability
By, Springbewsng Media limited February 25,2025
The Nigerian Naira has recorded a significant appreciation, selling below N1,500 per dollar in the parallel market for the first time in seven months. On Monday, February 24, 2025, the Naira traded at N1,500 per dollar, strengthening from N1,530 per dollar the previous weekend. This marks a continued recovery in the currency’s value and signals a potential shift in Nigeria’s foreign exchange market dynamics.
According to The Vanguard, the last time the Naira traded below N1,500 in the parallel market was on June 21, 2024, when it stood at N1,495 per dollar. However, despite the improvement in the parallel market, the Naira slightly weakened in the official Nigerian Foreign Exchange Market (NFEM), closing at N1,504 per dollar.
Data from the Central Bank of Nigeria (CBN) showed that the official exchange rate depreciated by N1.5 over the weekend, moving from N1,502.5 to N1,504 per dollar. This shift resulted in an unusual occurrence where the parallel market rate was lower than the official exchange rate for the first time in a long period. The exchange rate difference, which stood at N27.5 per dollar last Friday, narrowed to a negative N4 per dollar.
Market analysts at CardinalStone Research noted in their forex market review that “the FMDQ FX rate depreciated by 0.17% to N1,503.63 per dollar, while the parallel market rate appreciated by 0.67% to N1,500.00 per dollar.” This upward trend has led to a 9.4% and 2.2% year-to-date (YtD) appreciation of the Naira in the official and parallel markets, respectively, compared to N1,655 and N1,538.5 per dollar at the end of the previous year.
Economic analysts attribute the Naira’s recent strength to increased foreign exchange inflows, improved CBN interventions, and a reduction in speculative demand. The narrowing gap between the official and parallel market rates also suggests a move towards greater exchange rate stability, which could boost investor confidence and economic planning.
While it remains uncertain whether this trend will be sustained, the current trajectory offers hope for a more stable and predictable foreign exchange market in Nigeria.
