The Nigerian currency, the naira, has continued its rally against the dollar, closing positively in the Nigerian Foreign Exchange Market (NFEM) on Tuesday, May 20, 2025.

The naira has been on a week-long surge against the dollar, remaining mostly stable for the second week of May 2025.

CBN gives reason as the naira gains

The Central Bank of Nigeria (CBN) has attributed the naira’s surge to reforms in the FX markets.

On Tuesday, Olayemi Cardoso, CBN’s governor, stated at the Monetary Policy Meeting that the apex bank’s reforms are fueling the naira’s stability.

Data from the NFEM shows that the naira appreciated on Tuesday, closing trading at N1,588.50 per dollar, up from N1,580 it closed the previous day.

Currency dealers quoted the dollar at a high of N1,599 and a low of N1,560 per USD.

Experts commend CBN’s interventions

Economists have given thumbs-up to the apex for the naira’s stability, which has hovered around the N1,500 per dollar since the second week in May.

They say even when the nation’s foreign exchange reserves were down, the naira kept soaring in the FX market.

“There are reforms by the CBN that are driving the current stability, namely periodic interventions and circulars to provide transparency and confidence,” Janet Ogochukwu, a senior banker and an economist, said.

According to her, CBN has put in a lot to ensure that the local currency does not cross a certain threshold.

“We are seeing portfolio investors returning because there is some sort of stability and confidence in the naira,” she said.

Ogochukwu re-echoed the CBN governor’s sentiment, saying that the naira is now competitive.

Cardoso cited the recent round of global depreciation caused by the US policies and geopolitical tensions.

He said early reforms by the financial sector regulator have helped Nigeria to absorb the global economic shocks, stabilise the naira, and build investor confidence.

The naira falls in the black market

The naira, however, depreciated in the parallel segment of the foreign exchange market, down by N15 from N1,615 to N1,630 per dollar.

Currency dealers in the black market attributed the increased demand for the crash, saying that those who could not go through official channels rushed to the parallel market for FX.

“We experienced a slight uptick in demand on Tuesday. Maybe that is the reason for the crash, as you mentioned,” Abbas Yishau, a currency dealer in the Ogba axis of Lagos, said.