In May 2025, the naira appreciated against the US dollar in the official market, closing at N1,585.50/$1 on Friday, 30 May, up from N1,606.00/$1 on 2 May.
This marks a 1.28% gain for the naira over the month.
The month began with the naira closing at N1,606/$1 on 2 May, slightly weaker than the N1,602/$1 recorded on 30 April, the Central Bank of Nigeria (CBN) data indicates.
During the first full week of May, starting Monday, 5 May, the naira closed at N1,605/$1, a slight improvement. It depreciated to N1,609/$1 on Tuesday, 6 May, before slipping further to N1,612/$1 on Wednesday. However, it rebounded to N1,608.10/$1 on Thursday and strengthened again to N1,607/$1 on Friday, ending the week on a positive note.
In the second week, the naira opened at N1,597.70/$1 on Monday, 12 May, then weakened to N1,599.75/$1 on Tuesday. It appreciated to N1,596.01/$1 on Wednesday, dropped to N1,599.99/$1 on Thursday, and closed the week at N1,599.01/$1 on Friday.
The third week coincided with the CBN Monetary Policy Committee (MPC) meeting held on 19 and 20 May. The naira opened at N1,597/$1 on Monday, appreciated slightly to N1,588.50/$1 on Tuesday, then appreciated consistently: N1,583/$1 on Wednesday, N1,586/$1 on Thursday, and N1,579/$1 on Friday.
In the final full week of May, the naira traded between N1,579/$1 and N1,592/$1, with the CBN reporting it closed at N1,583/$1 on Monday, N1,590/$1 on Tuesday, N1,592/$1 on Wednesday, N1,587/$1 on Thursday, and N1,585.50/$1 on Friday.
The naira recorded its weakest value for the month in the official market on 7 May, closing at N1,612/$1. However, it remained relatively stable from 23 to 30 May, trading within the N1,579/$1 to N1,592/$1 range. This stability and moderate appreciation suggest potential impacts of CBN interventions or improved external balances.
Parallel market trends
In contrast, the parallel (black) market saw a decline. The naira closed May at N1,630/$1, down from N1,610/$1 at the start of the month.
This marks a 1.24% decline from the start of the month.
It hit its lowest point at N1,635/$1 on 15 May before recovering slightly. According to Nairametrics data, the currency traded mostly between N1,618/$1 and N1,625/$1 between 21 and 29 May, indicating some stability despite overall depreciation.
Naira still under pressure from global oil prices
Adding further pressure on the Naira, the Organization of the Petroleum Exporting Countries and its allies (OPEC+), the world’s largest oil producers, announced a planned increase of 411,000 barrels per day in production for July 2025.
In an official statement on Saturday, OPEC+ reaffirmed: “In view of a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories, and in accordance with the decision agreed upon on December 5, 2024, to start a gradual and flexible return of the 2.2 million barrels per day voluntary adjustments starting from April 1, 2025, the eight participating countries will implement a production adjustment of 411 thousand barrels per day in July 2025 from the June 2025 required production level.”
According to Nairametrics Research, this increase could suppress global oil prices if demand growth underperforms or inventories remain stable—posing further risk to Nigeria’s foreign exchange earnings and increasing pressure on the already volatile naira.
CBN remains firm on tightening monetary policy
At its 300th MPC meeting, CBN voted to retain the Monetary Policy Rate (MPR) at 27.5%, aiming to consolidate recent macroeconomic gains. However, a modest 25 basis point hike is also on the table, especially as inflation, while showing signs of easing, remains structurally high.
Speaking to Nairametrics, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, cautioned the CBN against excessive use of monetary policy tools to combat inflation.
He said, “When you go and put CRR at 50%, it’s gone to the extreme. There is no country in the world that has anything close to that.”
The MPC also kept key policy parameters unchanged:
- MPR at 27.5%
- Liquidity Ratio at 30%
- Cash Reserve Ratio (CRR) is at 50% for commercial banks and 16% for merchant banks.
