The naira appreciated slightly in the official foreign exchange window on Friday, May 16, 2025, settling at N1,599.01 per dollar, according to the Central Bank of Nigeria (CBN). This represented a modest improvement from the previous day’s closing rate of N1,599.99/$1.
Intra-day activity showcased continued fluctuations, with exchange rates swinging between a high of N1,603.50/$1 and a low of N1,597.00/$1, underlining ongoing market volatility and resilience.
Weeklong Exchange Rate Movements (Official Market)
- Monday: N1,597.70/$1
- Tuesday: N1,599.75/$1
- Wednesday: N1,596.01/$1
- Thursday: N1,599.99/$1
- Friday: N1,599.01/$1
Parallel Market: Downward Pressure Persists
The parallel market told a different story, with the naira losing ground against the greenback. Currency traders at the Wuse Zone 4 BDC hub in Abuja reported that the dollar was exchanged at N1,632/$1 on Friday, a depreciation from Thursday’s N1,625/$1.
Daily parallel rates showed some variance throughout the week:
- Monday: N1,633/$1
- Tuesday: N1,635/$1
- Wednesday: N1,625/$1
- Thursday: N1,635/$1
- Friday: N1,628/$1
According to Nairametrics data, Thursday’s brief drop in the naira’s value was linked to a temporary surge in dollar demand from importers and speculative market players.
Naira Shows Signs of Gradual Stabilization
Despite the disparity between official and parallel market rates, the naira ended the week with hints of strengthening. Analysts credit this to ongoing policy interventions by the CBN, including liquidity management measures and forex liberalization efforts.
Inflation Eases in April
In a welcome development, Nigeria’s consumer inflation rate decelerated slightly in April 2025. New figures from the National Bureau of Statistics (NBS) show that inflation slowed to 23.71%, down from 24.23% in March—a decline of 0.52 percentage points. This signals potential relief for consumers grappling with high living costs.
External Reserves Experience First 2025 Growth Trend
In another positive indicator, Nigeria’s external reserves posted their first sustained gain of the year. From April 30 to May 14, the country’s reserves grew by $364 million, climbing from $37.934 billion to $38.298 billion, representing a 0.96% increase.
This marks a pivotal shift, as reserves had been on a steady decline since peaking at $40.92 billion on January 6, 2025. Analysts attributed the rebound to the CBN’s commitment to enhancing transparency, liberalizing the forex market, and boosting investor confidence.
All Eyes on Upcoming MPC Meeting
The future direction of the naira remains tied to incoming capital flows, economic confidence, and macroeconomic fundamentals. Market participants now await the outcome of the Monetary Policy Committee (MPC) meeting slated for May 19–20, where monetary policy adjustments may be unveiled. The MPR was last held at 27.50% during the committee’s February session.
