Nigeria’s foreign exchange market witnessed a slight appreciation of the Naira, as the official exchange rate settled at ₦1,499.07 per dollar on February 27, 2025, improving marginally from the previous day’s rate of ₦1,499.10. However, in the parallel market, the local currency continues to trade around ₦1,498 per dollar, reflecting ongoing market dynamics despite the Central Bank of Nigeria’s (CBN) efforts to unify the forex market.
The CBN, in a landmark move since June 2023, consolidated all forex segments into the Investors & Exporters (I&E) window, promoting transparency and efficiency. The apex bank also reinstated the “Willing Buyer, Willing Seller” model, allowing market forces to play a greater role in price determination. Additionally, government-related transactions now follow a weighted average rate from the preceding day’s trades, reinforcing a structured market approach.
With these reforms, Nigeria has significantly loosened its grip on the naira, allowing it to float more freely. A truly floating exchange rate relies solely on demand and supply, removing central bank intervention. While this shift introduces short-term volatility, it paves the way for long-term market stability, enhanced investor confidence, and a more transparent foreign exchange system.