Currency Under Siege: Naira Faces Historic Decline In 2025

Currency Under Siege: Naira Faces Historic Decline In 2025

The Nigerian Naira continued its decline, trading at ₦1,541.36 per dollar on the first trading day of 2025. Data from the Central Bank of Nigeria’s (CBN) official NFEM rate revealed a 0.36% depreciation compared to ₦1,535.82/$ at the…Currency Under Siege: Naira Faces Historic Decline In 2025

close of 2024.

Authorized dealers reported varying rates, with some quoting the naira at ₦1,545/$ and others closing Thursday’s trading at ₦1,520/$. At the parallel market, the currency traded at ₦1,655/$, slightly improving from ₦1,670/$ earlier in the week.

Despite reforms by the CBN to stabilize the currency, including the introduction of an Electronic Foreign Exchange Matching System in December, the naira’s value has dropped significantly, marking a 40.9% depreciation in 2024 compared to ₦907.11/$ at the end of 2023.

Market Performance

Liquidity in the banking system was reflected in a dip in the Nigerian Interbank Offered Rate, while the Open Repo Rate and Overnight Lending Rate also saw minor declines to 26.69% and 27.25%, respectively. In bond markets, subdued trading activity led to a slight increase in average yields to 19.76%. Meanwhile, Nigeria’s sovereign Eurobonds experienced a modest 6 basis points drop in average yield, settling at 9.62%.

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