Naira Slightly Weakens to ₦1,529/$ as Forex Demand Rises Amid Card Transaction Resumption

The Nigerian naira experienced a marginal depreciation at the official foreign exchange market, closing at ₦1,529.22 to the dollar on Tuesday, compared to ₦1,528.33 the previous day. This minor decline reflects a softening in the naira’s performance as recorded on the Central Bank of Nigeria’s (CBN) official platform.

The weakening comes shortly after several Nigerian banks resumed international spending on naira-denominated debit cards. Banks like UBA, Wema, GTBank, and FirstBank have reinstated foreign transaction services with limits ranging from $500 to $1,000. This policy shift is anticipated to spur increased demand for dollars in a market that has recently been relatively stable.

Despite the uptick in demand at the official window, the naira remained unchanged at ₦1,540/$ in the parallel market, according to investment firm CardinalStone. In its mid-year outlook, the firm predicted that the naira would remain within the ₦1,550–₦1,635/$ range for the rest of 2025, citing macroeconomic trends and policy responses.

CardinalStone analysts attributed first-half naira volatility to external shocks, including U.S. trade policy shifts and global geopolitical tensions. These factors led to capital flight totaling $22.83 billion, pushing investors toward safer assets like U.S. Treasuries and gold. In response, the CBN intervened by selling $4.72 billion to support the market.

However, analysts clarified that these interventions should not be misinterpreted as a return to a fixed exchange rate regime. Instead, the current FX framework allows discretionary action to counteract market distortions. The CBN’s average monthly intervention of $786.58 million remains significantly below pre- and post-COVID levels, suggesting the naira is now trading closer to its fair market value.

Source: Punch