Mixed Naira Outlook as Analysts Disagree on FX Market – MarketForces Africa
The naira had a mixed performance against the US dollar in the foreign exchange markets recently, with a spot rate as low as N1535 per dollar. The authorities made a strong effort to support the local currency with daily FX auctions over four consecutive weeks in December.
As we started the new year, the naira’s exchange rate remained stable, with no major changes in the FX market. On the first trading day of 2025, the exchange rate was at N1538.23 per US dollar, according to FX spot data from FMDQ and Bloomberg BMatch. In the parallel market, the rate improved to N1,650 per dollar, showing a slight gain as FX demand eased.
In December, the naira strengthened to N1538 per dollar after the Central Bank of Nigeria (CBN) sold $107 million in weekly US dollar auctions to banks. These efforts were part of a plan to stabilize the exchange rate, especially towards the end of the year when demand tends to increase.
The CBN’s interventions in the FX market were aimed at achieving a more stable exchange rate and reducing speculative activities driven by wide spreads. The Apex Bank sold an average of $400 million in November and December to authorised dealer banks at lower rates, resulting in increased market activity and liquidity. Throughout December, the spot rate was consistently kept below N1600 per dollar due to these interventions.
