Naira opens at N1560/€, Euro hits a month high against the Dollar

The EUR/NGN opened trading in the unofficial market at N1560 from N1612/€ against the European currency on February 24, 2025.

According to a forecast issued late Sunday by ZDF broadcaster, the AfD received 20 percent of the vote, while the conservative CDU/CSU bloc secured 28 percent.

The focus is now on how soon the conservative Christian Democrats can assemble a coalition government to implement urgently needed reforms for Germany’s fragile economy.

Theoretically, the Grand Coalition and the “Kenya coalition”—a partnership between the conservative CDU, the SPD (Social Democrats), and the Greens—remain the most market-friendly options.

Markets are primarily interested in whether Germany will amend its “debt brake” policy, which limits its structural budget deficit to a mere 0.35% of output.

The euro reached a one-month high, and stock futures surged on Monday after Germany’s conservatives won the national election.

Currency traders showed little interest in increasing their dollar holdings, as Donald Trump’s potential second term was marked by aggressive rhetoric on tariffs, which caused the dollar to drop more than 3% from its peak in January.

The dollar also faced headwinds due to declining U.S. Treasury yields. As concerns about the future of the world’s largest economy grow, Treasury yields are rising in anticipation of additional Federal Reserve rate cuts this year.

The ongoing reforms by the Central Bank of Nigeria (CBN) have contributed to shifting dynamics in the country’s foreign exchange market. One key policy adjustment credited with the naira’s recovery was the implementation of the Electronic Foreign Exchange Matching System (BMatch) in December 2024.

This monetary framework establishes standards for ethical conduct, management, execution, information sharing, risk control, and settlement processes in the foreign exchange market. These reforms, which align Nigeria’s FX market with global best practices, have boosted investor confidence.