The Naira continues its turbulent ride against the U.S. dollar as the official exchange rate closed at ₦1,500.65 per dollar on February 6, 2025. According to data from the FMDQ Securities Exchange, the local currency had opened at ₦1,503.14 per dollar the previous day. However, at the parallel market, rates have climbed as high as ₦1,505 per dollar, reflecting the ongoing pressure on the Naira despite the Central Bank of Nigeria’s (CBN) forex unification policy.
CBN’s decision to merge all FX segments into the Investors & Exporters (I&E) window was aimed at improving market efficiency and price discovery. The policy introduced a “Willing Buyer, Willing Seller” model, allowing transactions to occur based on market demand. Additionally, government transactions now follow a weighted average rate, with no trading limits on oversold FX positions. While these measures were expected to stabilize the Naira, the persistent gap between the official and black market rates suggests that forex liquidity remains a significant challenge.
Nigeria’s move towards a floating exchange rate means the Naira’s value is now dictated by market forces, reducing direct central bank intervention. However, with rising demand for dollars and limited supply, the local currency remains under pressure. The long-term impact of these policies will depend on how effectively Nigeria attracts foreign inflows and boosts local production to reduce its dependence on imported goods.