Toba Owojaiye reporting
Abuja, Nigeria
In a surprising show of resilience, the naira held firm against the dollar, closing February 2025 with an 8.5% gain on the parallel market at N1,490/$ and settling at N1,500/$ on the official market. Despite concerns over foreign exchange reserves and market volatility, the local currency demonstrated strength, buoyed by the Central Bank of Nigeria’s (CBN) intervention strategies.
Truth Live News gathered from the Afrinvest Monthly Market Report, which highlighted that the nation’s foreign reserves dipped 3.2% month-on-month to $38.46 billion, largely due to CBN’s efforts to stabilize the currency, including settling part of the $7 billion forex backlog.
Encouragingly, analysts project that the naira’s recent momentum could continue in March, provided the CBN sustains its dollar supply to Bureau de Change operators and Deposit Money Banks while preventing adverse market shocks.
Market insights also point to global oil price fluctuations as a key influence. Bonny Light crude traded at $75.88 per barrel, a 3.2% week-on-week decline due to weakened global demand. This led to a $240 million reduction in Nigeria’s foreign exchange reserves, further underscoring liquidity challenges.
However, there are glimmers of hope. The CBN’s strategic interventions, including liquidity tightening and enhanced forex supply mechanisms, could bolster the naira further. Despite concerns over mounting debt, inflation, and forex reserves, analysts believe that with consistent policy support, the naira can gain more stability in the coming weeks.
For now, the local currency has shown it can defy pressure. With strategic intervention and a steady hand from the apex bank, the naira’s road to recovery may just be taking shape.