Naira Appreciates Against Dollar, Exchange Rate Hits 7-Month High
- The value of the Nigerian currency has hit a seven-month high after a strong performance against the dollar in recent days
- In the official market, the value of the naira increased by 4.1%, while in the black market, the dollar traded below N1,600
- The new exchange rates followed recent policies, such as the FX code introduced by the CBN
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Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The Nigerian currency, the naira, recorded a strong performance in January 2025 after one month of trading against the dollar.
Data from FMDQ securities showed that the naira gained N63.72 in January to close at N1,474.78 per dollar at the Nigerian Foreign Exchange Market (NFEM).
Source: Getty Images
The closing rate in January reflects a 4.14% appreciation, marking the naira's highest level in seven months.
The last time the naira closed at N1,4700 was on June 11, 2024, at N1,473.88/$ in the official market, Punch reports.
Why the naira appreciated?
The sharp appreciation has been attributed to policies implemented by the Central Bank of Nigeria which has influenced positive sentiments around the naira.
The naira began the year at N1,538.50/$ on January 2, 2025, and steadily gained value throughout the month.
After dipping slightly to N1,535.00 on January 3, it fluctuated before hitting N1,560/$ on January 16, marking its highest point for the month.
From the third week of January, the currency embarked on a sustained appreciation, closing at N1,531/$ on January 24, and strengthening further to N1,520/$ on January 28, before settling at N1,474.78/$ by month-end.
Naira also recorded strong performance in the parallel market, closing at N1,610/$ on February 2, up from N1,630/$ on February 1, representing a N20 gain within a day.
Some traders were even quoting the dollar buying rate at N1,590 in the black market.
Policies introduced by the CBN
Recent monetary and foreign exchange measures introduced by the CBN have been instrumental in stabilising the naira and boosting market confidence.
A key factor is the Electronic Foreign Exchange Matching System, launched in December 2024, which operates via Bloomberg’s BMatch system.
The platform enables authorised dealers to place anonymous orders in a central limit order book, ensuring transparency and efficient price discovery.
Additionally, the Nigeria Foreign Exchange Code (FX Code), launched on January 28, 2025, has strengthened investor confidence.
CBN Governor Olayemi Cardoso also announced that it has clear forex backlogs and this will go a long way to ease pressure on the forex market.
NESG predicts N1,300 naira to dollar exchange rate
Legit.ng earlier reported that there are more positive sentiments around the naira as the Nigerian Economic Summit Group (NESG) has forecasted a massive appreciation to an average exchange rate of N1,300 to the US dollar in 2025.
The optimistic projection was stated in its 2025 economic outlook.
According to NESG, the exchange rate forecast was based on higher foreign exchange earnings, driven by increased crude oil sales, revitalised manufacturing output from the oil refining sub-sector, and improved agricultural productivity.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
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