The naira continued its upward momentum on Wednesday, appreciating further in the parallel market and narrowing the gap with the official exchange rate to just ₦7 the slimmest margin recorded in recent months as reforms by the Central Bank of Nigeria (CBN) sustain currency stability.
The local currency closed at ₦1,537 per dollar in the parallel market, also known as the black market, gaining ₦8 or 0.5% from Monday’s rate of ₦1,545. This appreciation follows a one-day public holiday declared by the Federal Government in honour of former President Muhammadu Buhari.
At the official Nigerian Foreign Exchange Market (NFEM), however, the naira weakened slightly, depreciating by ₦11.37 to close at ₦1,530.25 per dollar on Wednesday, down 0.7% from Monday’s rate of ₦1,518.88, according to CBN data.
On Monday, the naira had surged to a four-month high of ₦1,518.88 at the official window, buoyed by improved dollar supply and moderating demand pressure. That level was last seen on March 14, 2025, when the naira traded at ₦1,517.93.
Despite the marginal dip on Wednesday, the naira has shown resilience. On Monday alone, it appreciated by ₦11.38 or 0.74% from Friday’s close of ₦1,530.26.
Analysts say the rally is underpinned by ongoing monetary and foreign exchange reforms aimed at boosting market confidence and increasing transparency. These reforms have helped attract capital inflows critical to maintaining Nigeria’s balance of payments and supporting the naira.
Data from the Central Bank’s macroeconomic update for the first half of 2025, compiled by FSDH Merchant Bank, showed that Nigeria attracted $5.03 billion in Foreign Portfolio Investments (FPIs) in Q1 2025.
As of June 27, 2025, the naira had depreciated by just 0.2% year-to-date, closing at ₦1,539. The currency had reached a peak of ₦1,630 on April 9 but has since reversed course.
FSDH analysts, however, warned that key risks remain, including declining oil output, global financial outflows, and crude prices falling below federal budget assumptions. They maintained their forecast that the naira would settle around ₦1,595 by the end of 2025.
In its latest Article IV consultation report on Nigeria, the International Monetary Fund (IMF) reiterated the need for a tight monetary policy and positive real interest rates to combat inflation and support exchange rate stability.