In February 2025, the Naira experienced an 8.5% increase on the parallel market, closing at 1,490/$, while on the official market, it closed at 1,500/$, showing a 1.7% decrease. The foreign reserve decreased by 3.2% month-on-month to $38.46bn.
The decline in the foreign reserve is attributed to the Central Bank of Nigeria’s efforts to stabilize the Naira, particularly through addressing outstanding foreign exchange backlog. Analysts predict that the Naira will continue its positive performance in March, supported by CBN’s USD supply to BDCs and DMBs.
The Naira showed slight strength against the US Dollar in the foreign exchange market, maintaining around the N1,500 mark in recent times. Factors influencing the market include the weak performance of the Nigerian oil benchmark, Bonny Light crude, which traded lower in the international market.
The decline in crude prices globally impacted Nigeria’s economy, resulting in lower forex reserves. The Naira appreciated marginally at the official window and gained at the parallel market due to eased demand pressure.
Looking ahead, analysts anticipate continued efforts to stabilize the forex market and support the Naira. Challenges such as high debt, declining reserves, and inflation rates threaten the potential benefits of ongoing forex reforms.