The Nigerian naira made a significant comeback in February 2025, appreciating against the US dollar, British pound, and euro in the parallel market.
This marks a positive shift from its previous downward trend, offering some relief to businesses and traders.
By the end of February, the naira recorded notable gains across key foreign currencies. The naira strengthened against the US dollar to N1,540/$, up from N1,620/$, reflecting a 7.41% appreciation.
Also, the naira strengthened against the British pound and improved to N1,910/£ from N2,000/£, marking a 4.50% increase, while it appreciated against the euro by rising to N1,550/€, compared to N1,660/€, showing a 6.34% gain.
This uptrend marks the strongest level for the naira since the beginning of 2025, indicating a short-term recovery in the foreign exchange market.
The official exchange rate followed a similar trend, stabilizing slightly above N1,500/$ in the weeks leading up to February’s close. According to data from the Nigerian Autonomous Foreign Exchange Market (NAFEM), the naira settled at N1,496/$1 in the official market at the end of February.
This stability comes amid efforts by the Central Bank of Nigeria (CBN) to bridge the gap between the official and parallel market rates, ensuring a more transparent forex system.
As of February 28, 2025, the Nigerian Naira (NGN) is trading at approximately ₦1,500 per US dollar in both the official and parallel markets. This convergence indicates a unified exchange rate market
Since the beginning of 2025, the naira has been trading above N1,600/$ in the parallel market. However, in February, the currency strengthened, hitting a yearly low of N1,480/$ on February 26, before settling around N1,500/$ by month-end.
In response to the forex volatility, the CBN has extended its weekly forex sales of $25,000 to Bureau de Change (BDC) operators until May 30, 2025. This move is aimed at increasing liquidity in the forex market and reducing the pressure on the naira.
The MPC also emphasized the need for government efforts to improve food security and enhance supply chains, ensuring a more stable economic environment to support currency appreciation.
While February saw a significant appreciation, experts warn that this trend may be temporary, with possible depreciation expected in March.
The coming months will be crucial in determining whether the naira can maintain its momentum or face renewed pressure in the parallel market.
The sustainability of the naira’s strength will depend on: