The Central Bank of Nigeria (CBN) is expected to maintain the stability of the naira in the coming weeks through its ongoing interventions in the foreign exchange (FX) market. Recently, the CBN directed Bureau De Change Operators (BDCs) to purchase $25,000 weekly from authorized dealers, a move designed to stabilize the naira and strengthen the country’s FX market. This intervention, alongside other measures, aims to control volatility in the exchange rates and foster consistent market performance.
In February 2025, the naira showed mixed performance. At the official foreign exchange market, the naira remained relatively flat, with the dollar trading at N1,500 at the end of the month. In contrast, at the parallel market, the naira appreciated against the dollar by 6.2%, closing at N1,505 compared to N1,599 at the beginning of the month. This improvement is attributed to CBN’s dollar supply to BDCs and Deposit Money Banks (DMBs), which analysts predict will continue supporting the naira in March.
However, the naira did experience depreciation against other major currencies, including the Euro and the British Pound, during the same period. The Euro was traded at N1,552.93 at the end of February, reflecting a 1.8% loss compared to the start of the month. The British Pound also saw a slight decline of 2.3% in the official market, closing at N1,838.15. Nevertheless, the naira did appreciate slightly in the parallel market for these currencies during specific trading days.
Nigeria’s external reserves also declined by $1.18 billion in February, dropping to $38.41 billion, a 2.98% decrease from the beginning of the month. This decline is partly attributed to the CBN’s efforts to stabilize the naira and address outstanding foreign exchange obligations. Despite these challenges, the naira’s recent performance suggests resilience, especially in the parallel market, where it appreciated against several foreign currencies.
SOURCE: BUSINESS DAY