Analysts at Optimum Global have projected that the naira will trade between N1,500 and N1,600 in the second half of 2025, assuming positive macroeconomic conditions persist.
This forecast was shared in their newly released half-year investment outlook report titled “Anchored Policy, Unanchored Risks”, which also offered projections for inflation and capital market performance.
According to the firm, the naira has stayed relatively stable because the Central Bank stepped in with targeted support, adding liquidity when needed, especially during times of high volatility in the global oil market.
“The second quarter began with currency weakness, triggered by falling crude oil prices and high demand for foreign exchange. However, the CBN’s active interventions—such as dollar sales in the spot market—helped stabilize the FX rate,” the report noted.
Optimum Global also noted that Nigeria’s external reserves rose to around $38.5 billion during the quarter, giving the Central Bank more room to manage volatility and cushion the economy against market shocks.
This, they explained, helped keep the naira trading within the N1,530–N1,600 range, despite swings in oil prices which would have affected the currency if not for the measures.
The report also noted that maintaining adequate reserves and continued efforts by the CBN to stabilize the market will be key to keeping the naira stable, just as it was in H1 2025.
USD-NGN trend in H1
The naira held relatively steady against the dollar in the first half of 2025, even as global oil prices swung sharply during the period.
- In January, the naira began trading at around N1,537/$ in the currency market but appreciated to about N1,480/$ by month’s end, driven by a spike in Brent crude prices to $76 per barrel, with Nigerian oil blends trading even higher.
However, from February to April, the story changed. The naira gradually weakened, falling to N1,596/$ by the end of April.
- This decline mirrored a sharp drop in global oil prices below $60 per barrel, after OPEC announced plans to boost oil output to 2.2 million barrels per day by November, starting with nearly 1 million barrels per day planned between April and June.
News of increased oil supply pushed prices lower, and the naira weakened in response.
However, things took a turn from May through June. Oil prices began climbing again, crossing $66 per barrel, while Nigerian grades traded above $70.
- The rebound was driven by rising geopolitical tensions, particularly between Iran and the U.S., and Iran and Israel, with fears growing that Iran might block the Strait of Hormuz, a vital oil route through which nearly 20% of global supply passes.
As oil prices spiked, so did the naira. By the end of June, it had strengthened to around N1,530/$, gaining about 3% from its April low.
Analysts noted that the naira’s recovery was not only due to rising oil prices but also supported by the Central Bank’s dollar sales, which helped keep the currency stable during March and April.
A CBN Injection
On April 4, 2025, the Central Bank of Nigeria (CBN) injected $197.71 million into the foreign exchange (FX) market as part of its ongoing efforts to boost liquidity and keep the market functioning smoothly.
This move came in response to growing global economic pressures affecting many emerging and developing economies, including Nigeria.
- One key problem was the introduction of new import tariffs by the United States on goods from several countries, which triggered volatility across global markets.
- Adding to the pressure, crude oil prices—a major source of Nigeria’s revenue—dropped by over 12%, settling below $65 per barrel.
- For oil-dependent countries like Nigeria, such a decline can negatively affect exchange rates and investor sentiment, increasing demand for the dollar.
To counter this, the CBN’s intervention aimed to stabilize the naira.
By injecting dollars into the market, the Bank increased supply and eased demand pressures, reducing the need for more naira to buy one dollar and helping to relieve pressure on the local currency.
