CBN Releases New Exchange Rate as Naira Hits Lowest in Three Weeks

CBN Releases New Exchange Rate as Naira Hits Lowest in Three Weeks

  • The Central Bank of Nigeria (CBN) has issued a new exchange rate for the naira following the lowest crash in three weeks
  • The naira depreciated to N1,612 per dollar on Wednesday, May 7, 2025, from N1,605 the previous day
  • The development comes as the foreign exchange inflows into the FX markets fell in April, data from the FMDQ showed

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The Nigerian currency, the naira, has hit a three-week low amid slowed foreign exchange inflow into the Nigerian Foreign Exchange Market (NFEM).

The fall was triggered by global trade dynamics, including dwindling crude oil reserves and other factors.

Naira hits lowest in three weeks amid slow dollar supply
Experts link the naira's crash to slow forex inflows in FX markets Credit: NurPhoto/Contributor
Source: Getty Images

The naira depreciates again

Data from the Central Bank of Nigeria (CBN) showed that at the end of trading on Wednesday, May 7, 2025, the naira fell to N1,612 to the dollar, down from N1,609 the previous day.

Currency dealers quoted the dollar at a high of N1,615 and a low of N1,605 per dollar.

The development comes as foreign exchange inflows into the Nigerian Foreign Exchange Market (NFEM) declined in April, showing the effect of the global tariff war and uncertainties caused by falling oil prices.

Data from the FMDQ showed that total FX inflows dropped by 5.7% monthly to $3.67 billion, from $3.90 billion the previous month.

Portfolio investment declines in Nigeria

The drop was reportedly caused by a 16.5% decline in foreign-sourced inflows to $657.4 million, the lowest since October 2024.

Also, foreign portfolio investments declined by 15.7%, while inflows from other corporates fell by 40.5%. However, foreign direct investment rose by 112.7% per month.

According to reports, local sources, which accounted for 82.1% of total inflows, also recorded a slight decline of 2.9% to $3.02 billion.

Experts attributed the decline in inflows to exporters/importers of less than 23.9% and non-bank corporates of less than 23.3%, despite a significant increase in inflows from individuals and the Central Bank of Nigeria (CBN).

Analysts say they expect FX inflows to remain stronger than in 2024 at $2.54 billion monthly, buoyed by CBN’s reforms.

They disclosed that sustained external pressures could keep liquidity constrained in the near term.

The naira appreciated slightly in April

Available data showed that the naira appreciated by 0.4% weekly to N1,589 per dollar during the period amid CBN’s $116 million intervention.

Gross reserves also increased, rising by $136 million to $37.93 billion as of April 30, 2025.

The analysts also warned that global uncertainty continues to be a risk to capital inflows and the naira’s stability, as market watchers expect the apex bank to maintain active intervention to prevent further volatility.

Leadership reports that the overnight rate eased marginally to 26.8% as system liquidity remained healthy at N1.36 trillion.

Decline in dollar inflows leads to the naira's crash
A new exchange rate emerges as the naira crashes to a three-week low. Credit: Novatis
Source: Getty Images

Nigeria’s financial instruments experience mixed sentiments

Treasury bills also attracted bullish sentiment, as average yields fell by 14 basis points to 23.7%.

CBN’s Open Market Operation (OMO) auction was oversubscribed, with N804.85 billion from N1.06 trillion in bids.

Reports say bond markets maintained a bearish run on the short end of the curve amid persistent positive sentiment as average yields increased by 2 basis points to 19%, with January bond selling off.

Dollar soars amid naira crash in FX market

Legit.ng earlier reported that the Nigerian currency has crashed against the US dollar for the second day this week, amid renewed volatility in the FX markets.

Experts have speculated further crash of the local currency amid global trends such as falling oil prices and dwindling national FX reserves.

The naira’s continued collapse has also been blamed on the sweeping trade tariffs imposed by the US President, Donald Trump.

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Proofreading by Nkem Ikeke, copy editor at Legit.ng.

Source: Legit.ng

Authors:
Pascal Oparada avatar

Pascal Oparada (Business editor) For over a decade, Pascal Oparada has reported on tech, energy, stocks, investment, and the economy. He has worked in many media organizations such as Daily Independent, TheNiche newspaper, and the Nigerian Xpress. He is a 2018 PwC Media Excellence Award winner. Email:pascal.oparada@corp.legit.ng