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| Naira edges higher amid recent FX inflows. |
Nigeria’s naira rose again on Thursday. It traded around N 1,553.11 per US dollar in the official FX market. This move follows weeks of gradual gains. Analysts link it to increased FX liquidity and cautious CBN actions.
In early June, data showed a slight dip to N 1,578.80 per dollar on June 3, 2025. By June 5, the average fell to N 1,567.30. Yet a Central Bank of Nigeria (CBN) report estimated N 1,553.11. This gap reflects timing and volume‐weighted calculations. Market watchers say the CBN’s FX auctions helped push the rate lower.
Over May, the naira gained about 1.3% in official trade. It moved from N 1,606.00 to roughly N 1,585.50 per dollar by May 30. That rise followed CBN steps to boost FX supply. Dealers note higher inflows from oil and remittances. Some say improved FX code compliance lifted confidence.
Another key factor is global oil prices. Nigeria relies on oil exports. When crude prices stay firm, foreign inflows rise. This adds dollars to the market. Experts say that helped the naira hold ground. Yet some warn that reliance on oil leaves the naira open to shocks. A sudden oil slump could reverse gains fast.
Economist Ayo Michael of Lagos University says the recent CBN FX interventions reduced pressure on the naira. He notes that stricter rules for FX users made banks more active in auctions. The result: more dollars hit official windows. This eased demand and pushed rates lower.
On the flip side, financial analyst Chioma Eze points out lingering gaps between official and black market rates. She cautions that parallel‐market weakness could signal deeper trouble. If black market rates stray far above official levels, it may erode confidence. It could drive more trade outside formal channels.
The NESG (Nigerian Economic Summit Group) earlier projected a stable 2025 rate around N 1,574 per dollar. They cited better non‐oil revenue streams and steady policy. Their view: if government spending stays on track, the naira may hold near mid‐N 1,500s. But they warn that rising domestic debt or funding gaps could undo progress.
Importers see relief when the naira strengthens. Cheaper dollar buys lower import costs, easing inflation pressure. Many sectors, like manufacturing and retail, rely on imported raw materials. A firmer naira helps cut their expenses.
Conversely, exporters may feel pinched. They earn naira on dollars sold, so a stronger naira yields less local currency per dollar. But long‐term stability can lure foreign investors. If rates stay steady, foreign firms may bet on Nigerian assets.
Consumers may feel mixed effects. Lower fuel and food prices tend to follow a strong naira. Yet if global oil dips or FX inflows wane, prices could jump again. Nigerians remain watchful of local pump and market stalls.
Most analysts expect the naira to trade in a narrow band through mid‐2025. They argue that modest improvements in non‐oil revenue and FX auctions will limit wild swings. However, they note several risks:
Oil Price Volatility: A sharp crude decline could cut dollar inflows. That may weaken the naira quickly.
Fiscal Deficit Pressures: Nigeria’s 2025 budget assumes an exchange rate of N 1,400 per dollar. If reality stays around N 1,550, debt‐service costs rise. This could crowd out other spending.
Global Dollar Strength: If the US Federal Reserve hikes rates or the dollar rallies, emerging‐market currencies often slide. The naira could slip even if local factors stay positive.
Economist Michael urges diversification. He says Nigeria must boost non‐oil exports and local production. That reduces reliance on dollar‐linked imports. Eze stresses transparency in FX auctions. She calls for clear data on daily FX flows. This can build trust and prevent rumors that spur market panic.
While many praise recent gains, some caution was needed. Improved oil earnings and remittances helped. But deeper reforms remain unfinished. Unless Nigeria fixes power, transport, and governance challenges, these gains can be fleeting.
Readers are welcome to share views. How do you see the naira’s path? Will policy shifts bring lasting stability? Or is fresh volatility around the corner? Let’s keep the talk open and grounded in facts.