The Nigerian naira depreciated further against the US dollar at the official foreign exchange market, closing at N1,609/$1 on Tuesday, May 6, 2025.
This represents a N4 decline from the previous day’s closing rate of N1,605/$1, based on figures published by the Central Bank of Nigeria (CBN).
The continued slide in the exchange rate reflects sustained pressure on the country’s external reserves and a widening demand-supply gap in the foreign exchange market.
This depreciation is occurring despite various interventions by the CBN to stabilize the naira and improve liquidity in the official market.
In the parallel (black) market, the naira also saw further weakening.
It closed at N1,615/$1 on Tuesday, down from N1,605/$1 recorded on Monday. The narrowing gap between the official and unofficial market rates suggests increased speculative activity and persistent challenges in accessing forex through official channels.
Despite the slight depreciation, market analysts continue to highlight the relative stability in the forex market, particularly since the apex bank’s foreign exchange reforms began taking hold.
The convergence of the official and parallel market rates has reduced the level of arbitrage opportunities in the market, a move applauded by investors and credit rating agencies.
Fitch applauds policy unification
Nairametrics reports that Fitch Ratings upgraded Nigeria’s outlook to Stable from Negative, highlighting renewed confidence in the Bola Tinubu administration’s commitment to far-reaching policy reforms.
- The rating agency specifically cited the introduction of the electronic FX matching platform, the implementation of a new foreign exchange code designed to improve transparency and efficiency, and ongoing monetary policy tightening as critical steps in restoring confidence in Nigeria’s FX market.
- These reforms are seen as part of broader macroeconomic stabilization efforts under the current administration, aimed at attracting foreign capital inflows, curbing inflationary pressures, and stabilizing the naira over the long term.
- While short-term volatility remains, stakeholders say the policy direction shows promise. Analysts also point to improvements in FX liquidity and growing investor confidence, with many now expecting further appreciation of the naira as structural reforms begin to yield results.
CBN Governor reiterates commitment to FX stability
The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has reaffirmed the apex bank’s commitment to fostering long-term economic stability, advancing financial inclusion, and ensuring policy transparency as Nigeria intensifies its reform agenda.
He noted that the increasing international interest in Nigeria is both encouraging and a reflection of the country’s growing momentum amid ongoing reforms.
