Naira Ends May 2025 Strong Against Dollar, Appreciates in FX Markets as Reserves Rise

• The naira ended May 2025 positively, appreciating by 1.01% at N1,586.15 per dollar, from N1,602.18 at the beginning of the month
• CBN data shows that the naira closed trading on Friday, May 30, 2025, gaining N16.03 against the dollar
• The naira, however, closed weaker in the parallel market, trading at N1,620 as of Friday, May 30, 2025, from N1,605 at the beginning of the month

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The naira ended May 2025 strong against the dollar in the Nigerian Foreign Exchange Market (NFEM), appreciating by N16.03, coinciding with a rise in Nigeria's foreign exchange reserves.

Data from the Central Bank of Nigeria (CBN) shows that the naira closed trading on Friday, May 30, 2025, at N1,586.15 per dollar, marking a light gain of 1.01% relative to N1,602.18 recorded on May 2, 2025, at NFEM.

The naira depreciates in the black market

In the parallel market, the naira depreciated by 0.9%, ending May weaker. On Friday, May 30, 2025, the dollar was sold at N1,620, marking an N15 drop relative to the N1,605 at the beginning of the month.

The divergence in the currency’s performance between the official and parallel markets shows the renewed volatility in the Nigerian FX market.

According to reports, Nigeria’s external reserves improved modestly in May.

CBN figures show that the reserves added $460 million or 1.2% from $38 billion at the beginning of May to $38.46 billion as of May 29, 2025.

The movement shows improved foreign exchange inflows, which allow the apex bank more buffer to sustain its FX interventions to strengthen the naira.

Experts expect more naira appreciation

BusinessDay reports that analysts at Afrinvest Securities Limited estimated that the naira could maintain its current positive movement in June.

They anticipated that the naira would maintain similar performance across all forex markets.

The development comes as the African Development Bank (AfDB) said the second half of the year will be challenging for the naira, the Ghanaian cedi and 19 other African currencies.

CBN raises hopes as AfDB predicts naira’s crash

This is according to a projection by the African Development Bank (AfDB), which predicted that the naira will fall by at least six per cent between 2025 and 2026.

The bank’s prediction comes after Olayemi Cardoso, the governor of the Central Bank of Nigeria (CBN), disclosed that the naira is now globally competitive and that the volatility in the foreign exchange market has reduced significantly.

Cardoso said the volatility declined by about 0.5%, citing improved monetary and fiscal reforms.

However, despite Cardoso’s optimism, the AfDB’s reports projected currency depreciation for 21 African countries in 2025, including Nigeria, Egypt, Ethiopia, Ghana, Libya, Rwanda, Zambia, and Zimbabwe, where currency depreciations are expected to occur at six per cent.

AfDB names robust African currencies 

The bank attributed the depreciation trend in these countries to potential declines in export earnings, which may impact national currencies.

Meanwhile, the AfDB report expects that currencies in Kenya, Morocco, and CFA franc-using countries will experience a robust currency rebound by more than three per cent against the US dollar, supported by stronger market dynamics.

In 2023, AfDB said that 28 African countries experienced currency depreciation, but 17 of them reversed the losses or recorded a slower rate of decline.

AfDB recommends solutions

Nigeria is part of the category that has yet to experience currency depreciation recovery.

The report shows the role of global factors in shaping currency trends while pointing to domestic challenges such as unguarded FX frameworks, fiscal deficit monetisation, political instability, and low productivity.

AfDB recommends that African countries boost domestic macroeconomic fundamentals, improve export capacity via value-added production, and implement strategic policies to reduce currency volatility.

CBN releases new dollar rates to clear goods in ports

Legit.ng previously reported that the CBN has increased the Customs foreign exchange rates for cargo clearance at Nigeria’s sea and airports.

The new rate comes amid the naira’s depreciation in the Nigerian foreign exchange market.

Data from the Customs trade portal shows that the apex bank increased the rate to N1,590.247 per dollar, up from N1,579.241.

Source: Legit.ng