The Nigerian naira closed February 2025 with an 8.5% month-on-month gain in the parallel market, settling at ₦1,490/$, while the official exchange rate declined by 1.7% to ₦1,500/$.
According to the Afrinvest Monthly Market Report, Nigeria’s foreign reserves dropped by 3.2% to $38.46 billion as of February 29. Analysts attributed this decline to the Central Bank of Nigeria’s (CBN) efforts to stabilize the naira, particularly through payments for verified portions of the $7 billion forex backlog.
Forex Market Trends and Oil Prices
The naira showed mild strength against the U.S. dollar, hovering around the ₦1,500 mark in both the official and parallel markets.
However, Nigeria’s oil benchmark, Bonny Light crude, declined by 3.2% week-on-week to $75.88 per barrel due to weakened global demand. This resulted in lower dollar inflows into the economy, further reducing forex reserves by $240 million (0.61% week-on-week).
At the official market, the naira appreciated by 93 kobo, closing at ₦1,500.15/$, while in the parallel market, it gained ₦5 to settle at ₦1,490/$ as demand pressure slightly eased.
Outlook for March
Analysts project that the naira will continue its positive performance in March, supported by:
CBN’s increased forex supply to Bureau de Change (BDCs) and Deposit Money Banks (DMBs).
Tightened liquidity measures to curb speculation.
Ongoing foreign exchange reforms aimed at boosting market confidence.
Despite these efforts, economic experts caution that rising debt, dwindling foreign reserves, and high inflation could still threaten long-term currency stability. Nonetheless, with the CBN expected to intensify its intervention, the naira may gain further ground in the coming weeks.
