Naira Appreciates Against Dollar In Official, Black Markets After 4-day Decline
- The naira appreciated slightly in the official market on Friday, trading at N1,536.82 per dollar, a N1.84 gain from the previous day
- This increase followed four days of minor declines, but the currency has remained relatively stable since December 2024
- In the black market, the dollar was bought at N1,540 and sold at N1,550 on March 28, 2025, according to BDC sources
Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology, Banking and the Economy.
The Naira strengthened slightly in the official market on Friday, March 28, 2025, trading at N1,536.82 per dollar.
According to data from the Central Bank of Nigeria (CBN), the currency gained N1.84, reflecting a 0.11% increase from the N1,538.66 per dollar recorded on Thursday.
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This rise came after four days of minor declines between Monday and Thursday. On March 24 (Monday), the Naira closed at N1,531.19 per dollar, followed by N1,532.39 on Tuesday and N1,537.62 on Wednesday.
Despite these slight fluctuations, the Naira has remained fairly stable since December 2024, largely due to the CBN's efforts to improve transparency in the foreign exchange market.
Black Market Exchange Rate
In the Lagos parallel market (Black Market), traders were buying dollars at N1,540 and selling at N1,550 on Friday, March 28, 2025, based on information from Bureau De Change (BDC) sources.
Abdullahi Umar, a BDC operator in the Ikeja axis of Lagos, spoke with Legit.ng highlighting reasons for appreciation of the naira.
He said:
"I’ve seen the naira gain strength recently, hitting ₦1,540 per dollar. This is due to increased dollar supply, improved forex policies, and reduced panic buying. If stability continues, we expect even better rates, though demand fluctuations still impact daily transactions."
The recent rise in the naira goes against warnings from Chatham House, a UK-based policy research group, which stated that a stronger naira may not benefit Nigeria.
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According to the think tank, a weaker naira has made Nigeria more competitive, unlike in past years when the exchange rate was around ₦460 per dollar.
CBN's attempts to strengthen the naira
Regardless of Chatham House's arguments, the CBN, led by Governor Olayemi Cardoso, has taken several steps to stabilise the naira, though the results have been mixed.
To restore the currency’s value, the CBN has issued various policies and directives. One key move was tightening regulations on Bureau de Change (BDC) operators, introducing new rules to control their activities.
Banks were also given instructions on how to manage the sale of dollars to customers to reduce unnecessary demand.
In 2024, the CBN introduced the Electronic Foreign Exchange Matching System to improve market transparency and help stabilise the naira.
Other measures include stricter monetary policies, clearing outstanding forex debts, and cracking down on those manipulating the currency market.
However, the naira remains under pressure due to high inflation, strong demand for dollars, and low foreign reserves.
Why naira has appreciated
Speaking on the matter, Dr Ifeanyi Ubah highlighted some of the key factors responsible for the recent appreciation of the Nigerian naira against the US dollar in both official and parallel markets.
He said:
"Foreign capital inflows surged to $6 billion, boosted by returning investors and relaxed currency controls. Increased foreign exchange supply to banks and Bureau De Change operators further stabilized the naira. Remittances from Nigerians abroad rose significantly, strengthening the currency."
He added that lower demand for the dollar, possibly due to improved local refining capacity, has contributed to the naira’s appreciation in the parallel market.
Naira among weakest currencies in Africa
In related news, Legit.ng reported that the naira has been ranked the 9th worst-performing currency in Africa, according to Forbes currency converter, last updated on March 25, 2025.
The dobra, the currency of São Tomé & Príncipe, is currently the weakest in Africa. This is due to the country's small economy, high dependence on imports, and low foreign exchange reserves.
Other weak African currencies include the Sierra Leonean Leone, Guinean Franc, Ugandan Shilling, and Burundian Franc.
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