The Nigerian Naira experienced a slight depreciation in the official foreign exchange market on Monday, closing at N1,498.98 per Dollar, according to data released by the Central Bank of Nigeria (CBN). This marks a N6.49 loss from its previous value of N1,492.49 per Dollar recorded last Friday, representing a 0.43% decline.
The depreciation comes after the Naira recorded a three-day appreciation streak in the previous week, reflecting ongoing fluctuations in the nation’s foreign exchange landscape. Despite the setback, financial analysts maintain that the Naira has exhibited relative stability over the past few months, largely attributed to the CBN’s ongoing reforms aimed at promoting transparency and efficiency in the Foreign Exchange (FX) market.
Since December 2024, the local currency has shown significant progress in regaining strength against the US Dollar. Market watchers credit this stability to policy adjustments by the apex bank, including measures to unify exchange rates, enhance liquidity, and curb speculative trading. These reforms, they argue, have injected greater confidence into the forex market, reducing volatility and fostering more predictable exchange rate movements.
Economic experts believe that while fluctuations in the Naira’s value are expected due to market forces, the broader trend suggests a currency gradually finding its footing. The CBN’s efforts to improve dollar supply, clamp down on illicit FX transactions, and encourage legitimate forex dealings have played a pivotal role in cushioning the currency from extreme volatility.
The latest depreciation is viewed as a normal market correction rather than a significant setback. Analysts highlight that periodic fluctuations are typical in the FX market, especially in an economy undergoing major currency policy reforms. They emphasize that investor confidence remains strong, particularly as Nigeria continues to implement structural economic policies aimed at strengthening its financial sector.
Market participants remain optimistic that the CBN’s intervention strategies, coupled with improved dollar inflows from oil exports, foreign direct investments, and remittances, will sustain the Naira’s stability in the long run. The apex bank has reiterated its commitment to ensuring a transparent and efficient FX market that aligns with global best practices.
As trading activities continue in the week ahead, all eyes remain on the CBN’s policy direction, as well as global economic factors that could influence the exchange rate. Observers expect a gradual strengthening of the Naira if the country maintains its current economic trajectory and sustains the reforms necessary to attract foreign exchange inflows.
