The Nigerian naira weakened to N1,541.36 per dollar on the first trading day of 2025, reflecting a 0.36 per cent depreciation from the closing rate of N1,535.82 per dollar recorded at the end of 2024.
According to the Nigerian Foreign Exchange Market (NFEM) rate data published by the Central Bank of Nigeria (CBN), the currency’s performance showed mixed sentiments across trading platforms.
At the official market, some dealers quoted the naira at N1,545 per dollar, marking an improvement compared to the N1,550 quoted earlier in the week, while others closed trading at N1,520 per dollar.
In the parallel market, the naira traded at N1,655 per dollar on Thursday, strengthening slightly from N1,670 per dollar quoted on Tuesday.
The naira recorded a significant 40.9 per cent depreciation in 2024, compared to its official rate of N907.11 per dollar at the close of 2023.
This depreciation occurred despite various foreign exchange reforms introduced by the Central Bank of Nigeria. Notable among these reforms was the introduction of the Electronic Foreign Exchange Matching System in December, aimed at enhancing transparency and attracting foreign investors. While the system initially provided some stability, the naira’s overall performance remained weak.
In the money market, liquidity improved as the Nigerian Interbank Offered Rate (NIBOR) saw downward movements across all maturities. However, the Open Repo Rate dropped by 0.61 per cent to 26.69 per cent, while the Overnight Lending Rate fell by 0.55 per cent to 27.25 per cent.
In the secondary market for Federal Government of Nigeria (FGN) bonds, trading remained subdued, causing a slight rise in the average yield to 19.76 per cent. Nigeria’s sovereign Eurobond market, on the other hand, witnessed buy pressure across short-, mid-, and long-term bonds, resulting in a six basis-point decline in the average yield to 9.62 per cent.
The naira’s performance in the new year will depend heavily on the effectiveness of the CBN’s policies in addressing foreign exchange volatility and restoring investor confidence. Analysts anticipate further policy adjustments to stabilize the local currency and strengthen Nigeria’s financial markets.
