Naira Depreciates Against US Dollar As FX Turnover Skyrockets
- New data shows that forex turnover jumped significantly in H1 2025, boosted by participation under the CBN’s EFEMS
- The increase in liquidity boosted the naira, strengthening overall at the official market and at the parallel market
- The CBN attributed the gains to stronger FX liquidity, rising external reserves
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
Total FX turnover climbed to $52.47 billion in the first half of 2025, a 262.4% increase from $14.48 billion in the preceding half-year.
The increase is driven largely by the rollout of the CBN’s Electronic Foreign Exchange Matching System (EFEMS), the apex bank said in its Financial Stability Report published on its website.
Source: UGC
Forex activities in 2025
According to CBN, FX activity picked up sharply during the period, with sales rising to $4.74 billion from $3.18 billion in the second half of 2024, while purchases stood at $3.97 billion, resulting in net sales of $0.77 billion.
The CBN said no new forward transactions were recorded during the review period.
There were also no new over-the-counter (OTC) FX futures contracts during the period, but matured contracts rose to $86.49 million from $78.70 million at end-December 2024.
As a result, outstanding FX futures contracts declined sharply to $1.56 million, from $88.05 million in the preceding half-year.
BusinessDay reports that the Bilateral Currency Swap Agreement (BCSA) between the CBN and the People’s Bank of China, valued at N720 billion (CNY15 billion) and renewed in April 2024 for three years, remained active in the first half of 2025.
No new transactions were recorded, keeping cumulative sales at CNY9.22 billion.
The CBN said it also conducted FX examinations of 34 authorised dealers, including 29 commercial banks and five merchant banks, to ensure compliance with FX regulations, verify sources of FX inflows and assess the use of foreign exchange for eligible transactions.
Source: Getty Images
Naira to dollar exchange rate
Meanwhile, at the Nigerian Foreign Exchange Market (NFEM), the naira slipped slightly on Thursday, weakening by N1.38 to N1,422.07 per dollar, from N1,420.69 on Wednesday, according to CBN data.
In the parallel market, the currency strengthened marginally to N1,487 per dollar, from N1,490, where it had traded for about two weeks.
Also, Nigeria’s external reserves continued to rise, reaching $45.98 billion as of January 21, 2026.
The CBN attributed the currency’s improved performance to stronger FX liquidity and the adoption of the Nigerian FX Code, which it said enhanced market-based price discovery, transparency and ethical conduct, helping to bolster investor confidence.
10 worst-performing currencies
Earlier, Legit.ng reported that the naira has dropped out of Africa’s 10 worst-performing currencies after gains recorded late in 2025, ending a near two-year stay on the bottom-ten list.
Data from the Forbes currency calculator show the naira exited the ranking in October and remained outside it through December, supported by stronger external reserves, policy adjustments and improved foreign exchange liquidity.
Overall, the currency is estimated to have closed the year between Africa’s 15th and 20th weakest.
Source: Legit.ng
