Dollar Weakens Again: Recent Forex Policy Changes Show Impact as Naira Surges
- The US dollar continued its downward trend against the naira in the official foreign exchange window
- The dollar depreciated against the naira on Monday, March 3, 2025, trading at N1,499 as against N1,500 it traded the previous day
- The naira stabilised for most of February, ending the month positively below the N1,500 mark in the official window
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The US dollar suffered another decline in the Nigerian Foreign Exchange Market (NFEM) on Monday, March 3, 2025.
Coming amid several policy changes in the forex market by the Central Bank of Nigeria, the Nigerian currency has rebounded massively against the US dollar since the end of February.
Source: Getty Images
Naira appreciated in the official window
The naira, which ended February positively below N1,500 per dollar, appreciated on Monday, March 3, 2025, trading at N1,499, up from N1,500 on Friday, February 28, 2025.
Data from CBN’s NFEM portal shows that currency traders quoted the dollar at a high of N1,501 per dollar and a low of N1,491.
The CBN data shows that the naira stabilised for most of February, hovering around the N1,500 ceiling, which analysts say is a sign of reduced volatility.
The naira recorded its highest peak in February when it traded at N1,495 to a dollar on February 26, 2025, while its lowest level was on February 13, 2025, when it depreciated to N1,515.
However, the naira depreciated slightly in the parallel segment of the forex market.
According to information from Bureau de Change (BDC) operators, the naira traded at N1,510 per dollar in the black market, down from N1,505 it traded the previous day.
Analysts praise CBN’s policies
Analysts have attributed the naira’s rally to a raft of policies introduced by the apex bank to combat volatility, improve efficiency, and boost transparency.
Zeal Akaraiwe, the CEO of Graeme Blaque, disclosed in a recent TV interview how the apex bank achieved the naira stability.
This year, the parallel market rate has appreciated steadily, stabilising at the N1,500 per dollar ceiling.
Feelers from Bureau de Change (BDC) operators show that the rate in the parallel market currently trades around N1,500, while the official window is about N1,501 per dollar as of February 25, 2025.
The near convergence between the two segments shows a significant alignment.
Akaraiwe disclosed that policy corrections contributed greatly to correcting the anomaly in the forex management.
In 2024, the regulator issued almost 20 circulars around FX management including the use of Bloomberg’s BMatch system in interbank FX trading.
How CBN’s policies saved the naira
Senior banker and economist, Janet Ogochukwu praised CBN’s foresight for the naira’s relative stability.
She described some of CBN’s policies as timely in salvaging the FX market and restoring investor confidence.
Source: Getty Images
“Now investors are optimistic. They can predict the market with relative accuracy since it is now stable.”
She said calls for the naira to trade lower than its current value may not be achievable at the moment but not impossible.
“Right now, it is not impossible, but the current CBN leadership is still mastering the market dynamics and making the necessary corrections,” she said.
Naira sustains gains in all markets
Legit.ng earlier reported that since the CBN introduced the Electronic Matching System (EFEMS), Nigerian currency has appreciated against the British pound sterling, euro, and Canadian dollar.
The apex bank mandated all banks and authorised dealers in the interbank foreign exchange market to migrate to the Bloomberg BMatch System for trading to boost transparency and efficiency.
The platform went live on December 2, 2024, and boosted transparency and operational efficiency in Nigeria’s forex market.
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Source: Legit.ng
