Naira Trades At New Rates As Access, Zenith, UBA, Others Sell Dollar At High Prices
- The naira depreciated against the US dollar for the second day this week, trading at N1,505 per dollar from N1,502
- The local currency’s depreciation came amid a decline in Nigeria’s foreign exchange reserves to $38.4 billion
- The naira has remained relatively stable at N1,500, which analysts say may be its actual value after floating the federal government
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The naira’s value depreciated again on Wednesday, March 5, 2025, in the Nigerian Foreign Exchange Market (NFEM).
The local currency was exchanged for N1,505.00 per dollar at NFEM, further down from N1,502 it traded the previous day.
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Naira experiences volatility again
On Wednesday, March 5, 2025, currency dealers quoted the dollar at a high of N1,505 and a low of N1,497.10 to a dollar.
The naira has relatively stabilised, hovering around the N1,500 ceiling, which analysts say may be its actual value after devaluation by the Nigerian government.
The current naira’s new value came amid the depreciation of Nigeria’s foreign exchange reserves.
Foreign exchange reserves depreciate
According to data from the Central Bank of Nigeria, the nation’s reserves stood at $38.4 billion as of March 5, 2025, relative to $38.3 billion.
It means that despite the reserves appreciating by $695.5 million in 24 hours, it is still a far cry from the 2025 peak of $39.1 billion on February 12, 2025.
The decline has been attributed to several factors, including debt service and foreign exchange market interventions to defend the naira.
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Meanwhile, the naira appreciated in the parallel segment of the foreign exchange market at N1,512 from N1,515 per dollar.
Consequently, the margin between the parallel market and NFEM rate narrowed to N7 per dollar from N13 per dollar.
Naira: CBN introduces bold reforms
Analysts have disclosed that various interventions by the CBN were responsible for the relative naira stability, citing reforms by the apex bank.
In 2024, CBN reportedly issued about 20 circulars aimed at correcting market shortcomings and providing stability.
The reforms were praised for restoring confidence in the FX markets and boosting liquidity, transparency and efficiency.
The apex bank recently launched the FX Code to enhance transparency in the local currency market, which contributed to the naira appreciation in the forex markets.
It warned banks and dealers against flouting the code’s tenets, which were anchored on six pillars.
Naira’s Gain: CBN crashes dollar for importers
Legit.ng earlier reported that CBN has adjusted the foreign exchange for Customs duty amid the depreciation of the naira on Friday, February 28, 2025.
Importers who opened Form M on Friday, February 28, 2025, would pay less than those who opened on Thursday, February 27, 2025.
The apex bank fixes the rate in line with the prevailing exchange rate. However, experts have advocated for a monthly or quarterly FX rate for Customs duty.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
