Naira Gains 2.3% on Dollar, 1.8% on Euro, 0.65% on Pound Sterling in February

This is according to recent data from the Central Bank of Nigeria (CBN), which showed that the Nigerian currency strengthened against major currencies last month at the official market.

Similarly, the Naira strengthened by 1.8 per cent against the Euro, averaging N1,562.35/€1 versus N1,590.72/€ and by 0.65 per cent against the Pounds Sterling at N1,882.0/£1 in February 2025 compared with N1,894.2/£1 in January 2025.

This improvement in the value of the local currency came on the heels of a series of strategic policies implemented by the CBN to stabilize and strengthen the domestic currency.

These key measures included the introduction of the Electronic Foreign Exchange Matching System (launched on December 2, 2024), the Nigeria Foreign Exchange Code (January 28, 2025) and selective intervention in the foreign exchange market.

The apex bank also helped quell Naira volatility by clearing a backlog of orders to sell Naira for foreign currency and boosting dollar supply to the Bureau de Change (BDC) operators by extending its access window.

However, Nigeria’s foreign reserves witnessed constant drops to a month low of $2.2 billion in February, since hitting a $40.92 billion high on January 6.

Market analysts noted that it would be imperative to sustain and build on this momentum with further efforts needed including support of local businesses to produce substitutes for imports, through improved access to credit and technology.

In addition to domestic support, critical investments in the health and education sectors are essential to reduce the demand for foreign services, such as medical and health tourism.

In another set of data, currency outside banks surged by 44.5 per cent in January 2025 to N4.7 trillion by January 2025 up from N3.3 trillion in January 2024, according to the latest data from the Money and Credit statistics of the apex bank.

Meanwhile, currency outside the bank represents 12.8 per cent of narrow money in January 2025, an increase from 10.4 per cent in January 2024.

Also, currency outside banks as a percentage of total money supply (M3) increased in January 2025 to 4.3 per cent from 3.5 per cent during the same period last year. Thus indicates a growing preference for cash-based payments and an expansion of the informal economy.