Naira strengthens, trades below N1,555/$1 in parallel market 

The naira closed at N1590/$1 on Thursday in the parallel market and N1,502/$1 in the official market.

According to data from the Central Bank of Nigeria (CBN) currency monitor, the naira exhibited a steady performance, fluctuating between N1,499/$1 (lowest) and N1,502/$1 (highest) during the week, ultimately closing on Thursday within this range.

The week opened with the naira trading at N1,620/$1 in the parallel market on Monday, February 3, 2025.

This marked a stable trend following its closing rate of N1,620/$1 on January 31, 2025 in the parallel market. In the official market, the naira closed at N1,475/$1, the strongest the currency had seen in several months since the floating of the forex market by CBN.

As the week progressed, the currency continued to gain strength, indicating increasing market confidence.

Naijaonpoint reports that the naira started showing signs of stability by midweek, trading at N1,605/$1 on Wednesday, February 5, 2025.

This marked a significant improvement compared to previous weeks and could indicate increased forex supply or intervention by monetary authorities.

The naira also appreciated against other major foreign currencies, particularly the British pound (GBP) and the euro (EUR). Below is a summary of the exchange rates during the week:

Several factors may have contributed to the naira’s improved performance in the parallel market, including:

Some analysts have said the exchange rate stability could be a result of CBN extending the deadline for Bureau de Change (BDC) operators to access the Nigerian Foreign Exchange Market (NFEM) for weekly FX purchases.

Recall that earlier this week, the apex bank announced that the previous deadline of January 31, 2025, has now been extended to May 30, 2025.

Market analysts anticipate that if the current trend continues, the naira could sustain its stability or even appreciate further in the coming weeks. However, factors such as inflationary pressures, oil price fluctuations, and forex reserves will play a crucial role in determining the long-term trajectory of the naira in the forex market.