Naira marginally lower against strong U.S. Dollar

CBN data showed that the naira depreciated and settled at N1,538 against the greenback in the official market on Tuesday, compared to N1,536 quoted on Monday at the Nigerian Foreign Exchange Market.

The Nigerian naira held steady at N1,660 to the dollar on the black market.

The parallel market remained stable in contrast to the slight oscillations seen in the official FX market. This development shows that activity in the unofficial market is gradually adjusting in the new year.

The naira experienced its worst decline in 2024, falling to N1,910/$ in the black market in February, despite trading at roughly N1,700 in the official window. The local currency lost more than a third of its value this year due to the federal government’s drastic currency reforms, which included floating the currency.

The local currency experienced a significant recovery following the implementation of the Electronic Foreign Exchange Matching System (EFEMS), gaining more than N120/$ in value within a month. The CBN adopted the EFEMS strategy as part of a set of changes meant to curb speculation and improve transparency in Nigeria’s foreign exchange market.

The greenback showed high stability on Wednesday, bolstered by high Treasury yields following solid economic data from the world’s largest economy.

The safe-haven currency maintains a bullish structure, with technical indicators continuing their upward trajectory.

The dollar index demonstrated strong underlying support by successfully defending its 20-day Simple Moving Average (SMA).

The market continues to lower the pricing on possible rate cuts this year amid a slowing but not collapsing jobs market, high inflation concerns, and respectable growth.