The naira continued its downward trajectory on Tuesday, April 29, 2025, closing at N1,602.02/$1 at the official Nigerian Foreign Exchange Market (NFEM).
This is according to data published by the Central Bank of Nigeria (CBN).
This represents a further depreciation from Monday’s closing rate of N1,596/$1, reflecting sustained volatility and dollar scarcity in the forex market.
The intraday trading activity of the naira showed a high of N1,602.02/$1 and a low of N1,596.7/$1, with a simple average rate of N1,600.04/$1 for the day.
This marks a clear weakening trend compared to the previous Friday, where the naira traded around N1,600/$1, showing a widening gap.
The persistent depreciation highlights ongoing pressure on the local currency as Nigeria continues to grapple with inadequate dollar inflows and speculative demand in both official and unofficial markets.
Parallel market mirrors depreciation
In the parallel (black) market, traders in Abuja’s popular Zone 4 currency exchange hub confirmed that the dollar sold for as high as N1,610/$1 on Tuesday, a depreciation from N1,605/$1 on Monday.
This further widens the gap between the official and unofficial markets, intensifying concerns over market arbitrage and speculative trading activities.
Dealers also noted growing demand from importers and individuals seeking foreign currency for overseas transactions, which continues to strain the limited forex liquidity available in the market.
What market watchers say
Market analysts attribute the naira’s recent slide to a combination of supply-side constraints, monetary tightening in the United States, and dwindling foreign reserves.
An Abuja-based economist, Bulus Anag, told Nairametrics that “without a significant inflow of forex either from oil exports, remittances, or foreign portfolio investors, the naira will continue to remain under pressure.”
Others believe that while the CBN’s foreign exchange reforms, such as the unification of exchange rates and gradual clearance of FX backlogs, have shown promise, but yet to achieve stability in the market.
“We are not seeing enough dollar inflows to match demand. Until confidence is restored and supply is boosted, possibly via Eurobond issuance, oil revenue rebound, or IMF support, the naira will struggle,” said a senior forex analyst at Ren Money, who doesn’t want his name in print, told Nairametrics.
On Monday, Raheem Obadofin, a Lagos-based forex trader, told Nairametrics “The fact that the naira weakened across both official and parallel markets after the holidays indicates lingering concerns over FX liquidity.”
“Market participants are still cautious, and demand continues to outpace supply,” he noted.
With no immediate interventions or fresh dollar injections expected, market participants anticipate further volatility in the coming weeks.
Traders expect the naira to hover between N1,600/$1 and N1,620/$1 at the official window unless there is a sharp reversal in forex inflows or a major policy shift from the CBN.
What you should know
On Monday, CBN directed all banks operating in the country to adopt the Pan-African Payment and Settlement System (PAPSS) and commence originating transactions under the new framework. Under this policy, individuals conducting transactions up to $2,000 or its naira equivalent, and corporates up to $5,000 equivalent, can now use basic Know Your Customer (KYC) and Anti-Money Laundering (AML) documents previously submitted to their Authorized Dealer Banks (ADBs).
The apex bank raised a total of N1.008 trillion at its Open Market Operations (OMO) auction held on Friday, April 25, 2025, following overwhelming investor demand that led to a 102% oversubscription.
