The Nigerian currency showed some strength in the Nigerian foreign exchange market, while the haven currency dipped to its lowest level since February 2022 in the global currency market.
The Nigerian naira strengthened to N1,527 against the U.S dollar on the official Nigerian Foreign Exchange Market, the CBN’s trading window for foreign currencies.
CBN data show the rate improved from N1,532 on Monday, a modest gain of N5.
This positive development at the Nigerian official market coincides with a decline in the country’s external reserves, which fell $3.05 billion in the first half of 2025.
In particular, the reserves decreased from $40.88 billion at the end of 2024 to $37.37 billion at the end of last month. However, on the black market, the Nigerian currency declined to N1,585/$ on Tuesday after closing at N1,570/$ on Monday.
The country’s debt stock increased mainly due to a weak naira over the longer term. Nigerian public borrowing rose by N27.72 trillion over twelve months to N149.39 trillion, because of a weaker naira inflated foreign liabilities.
The Debt Management Office noted that debt is now 22.8 percent higher than it was a year ago, when the total was N121.67 trillion.
President Bola Tinubu recently approved four major tax bills aimed at attracting investors, boost revenue, and increasing the country’s tax-to-GDP ratio.
The federal government relies more on concessionaire financing and public-private partnerships to reduce dependence on external borrowing. Nevertheless, fiscal pressures continue to strain the budget
U.S dollar sinks in global markets
The US dollar remains near its weakest level since February 2022, as traders consider dovish remarks from Federal Reserve Chair Jerome Powell and potential impacts of Donald Trump’s new spending proposal.
- The greenback hovers near its lowest point since September 2021 against the euro and nears a new low against the Swiss franc not seen since January 2015.
- Speaking at the European Central Bank’s annual gathering in Portugal, Powell emphasized that the Fed would proceed cautiously on interest rate adjustments, though he did not rule out a cut at this month’s meeting, stating that the decision depends entirely on incoming data.
- This process adds significance to Thursday’s US non-farm payrolls report, especially after robust job openings data in the JOLTS release the night before helped lift the dollar from Tuesday’s lows.
- Meanwhile, the dollar index, which measures the greenback against six major currencies, edged up to 96.744 but remained within the overnight range, which bottomed at 96.373.
Traders are closely watching headlines about Trump’s expansive tax-and-spending plan, a package experts say could add another $3.3 trillion to the national debt.
The measure is now headed back to the House for final approval or rejection after passing the Senate. Trump’s ongoing criticism of Fed Chair Jerome Powell has raised questions about the central bank’s independence, adding political pressure that weighs on the US dollar.
Trump showed Powell a chart of key global interest rates, annotated with his notes, suggesting that US borrowing costs should be between Japan’s 0.5 percent and Denmark’s 1.75 percent.
