The Nigerian naira posted a modest gain against the U.S. dollar in the official Nigerian Foreign Exchange Market on Tuesday, even as the American greenback slipped to its lowest level in over two years globally.
Data from the Central Bank of Nigeria (CBN) show that the naira appreciated to N1,527/$, up from N1,532/$ on Monday, marking a N5 improvement. The move reflects a minor rebound in the official market despite ongoing economic headwinds.
However, the black market painted a different picture, where the naira fell to N1,585/$, compared to N1,570/$ the previous day, highlighting continued volatility outside the CBN-regulated window.
Meanwhile, Nigeria’s external reserves declined significantly in the first half of 2025, dropping $3.05 billion from $40.88 billion in December 2024 to $37.37 billion in June 2025. Analysts attribute the fall to external debt servicing and foreign exchange interventions.
In another concerning trend, Nigeria’s public debt stock surged by N27.72 trillion year-on-year to reach N149.39 trillion, driven largely by exchange rate pressures inflating foreign-denominated obligations. The Debt Management Office reports that this figure represents a 22.8% increase over the previous year’s total of N121.67 trillion.
To address fiscal challenges, President Bola Tinubu recently signed four tax reform bills aimed at attracting investment, enhancing government revenue, and increasing the nation’s tax-to-GDP ratio. The federal government has also increased its reliance on concessionaire financing and public-private partnerships to mitigate excessive external borrowing.
In global markets, the U.S. dollar continued its descent, reaching its lowest point since February 2022, weighed down by dovish remarks from Federal Reserve Chair Jerome Powell and fresh uncertainty surrounding Donald Trump’s expansive tax-and-spending proposal.
Powell, speaking at the European Central Bank’s annual meeting in Portugal, signaled a cautious approach to interest rate changes, leaving the door open for a possible rate cut. His comments, along with strong job opening data in the latest JOLTS report, caused mixed movements in the dollar.
The U.S. Dollar Index, which tracks the currency against six major peers, edged slightly up to 96.744 but remained near a multi-year low, with overnight trading dipping to 96.373.
Investors are also monitoring Trump’s proposed $3.3 trillion spending package, which has raised concerns over increased federal debt and political interference in Fed policy. Trump’s direct criticism of Powell and his controversial presentation of global interest rates as justification for lower U.S. borrowing costs have further unsettled currency markets.
The dual pressure of domestic fiscal instability in Nigeria and global dollar weakness sets the stage for continued volatility in both local and international financial markets.