CBN Adjusts Exchange Rates as Naira Tumbles in Official And Parallel Markets
- The Nigerian naira has continued to depreciate in both the official and parallel markets, following its stellar performance during the first week
- The week-long loss continued in the official and parallel markets on Wednesday, January 15, 2025, with the naira falling 0.09%
- The local currency opened trading at N1,549 per dollar on Wednesday and closed at N1,551.10 per dollar
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The Nigerian currency, the naira, maintained its week-long losing streak on Wednesday, January 15, 2025, falling by 0.09% in the Electronic Foreign Exchange Market System (EFEMS).
The naira opened trading negatively at N1,549 per dollar, the same rate it closed the previous day.
Source: Getty Images
Naira continues losses in all markets
At the end of trading on Wednesday, January 15, 2025, the naira depreciated by 0.09% to trade at N1,551.10 per dollar.
Forex buyers quoted the dollar at an intraday high of N1,554 per dollar and a low of N1,5,545.
Similarly, the naira tumbled in the parallel segment of the forex market, trading at N1,660 per dollar, down from N1,650.
Parallel market dealers said high demand has returned, causing the volatility.
Traders say volatility has returned
Abbas Yishau, an FX dealer in Lagos, attributed the fall to high demand from Nigerians returning abroad after the Christmas holidays.
“Nigerians are returning to their bases after Detty December and putting pressure on the forex market by mopping dollars,” he said.
Similarly, senior banker and economist Janet Ogochuckwu said the banks are swarmed with FX requests, stating that demand is rising and may outstrip supply.
“There are rising forex demands in the market now, especially from banks, which have been unmet. After the holidays, the banks were swarmed with requests for forex from Nigerians returning.”
She stated that requests by importers are slim due to the slow start of businesses.
Naira relatively strong against other currencies
The naira began the new year strong against the US dollar despite predictions that it may hit close to N2,000 in 2025.
A recent analysis by Legit.ng showed that the Nigerian currency has remained relatively strong despite the dollar's surge to a two-year high against major currencies on Monday, January 13, 2025.
The naira has remained stable against the US greenback compared to peer currencies.
Naira begins 2025 strongly against dollar
The naira flatly ended the first week of trading in 2025 as pressure eased on the FX market.
Data from the Central Bank of Nigeria (CBN) shows that the naira began 2025 at N1,538,50 per dollar on January 2, 2025. By the week’s end, the naira slightly fell to N1,544.40 against the dollar, showing a 0.4% marginal decline.
Naira gains as new CBN platform aids transparency
Legit.ng previously reported that the EFEMS' transparency resulted in the naira's continued demand in the parallel market.
The system by the Central Bank of Nigeria (CBN) reportedly caused currency speculators and illegal market operators to source FX elsewhere.
Apart from illegal traders, legitimate buyers who could not meet the new platform’s requirements seemingly also turned to the parallel market, which boosted the value of the local currency.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
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Source: Legit.ng
