Naira’s Surge Continues: Gains Big in Official Market

The Nigerian naira has been strengthening in the official foreign exchange market, experiencing a slight appreciation of ₦5 against the US dollar, and closing at ₦1,527 per dollar. This change coincides with a decrease in the nation’s external reserves, which dropped by $3.05 billion during the first half of 2025.

Despite the naira’s appreciation in the official market, it fell to ₦1,585 per dollar in the black market, following a closing rate of ₦1,570 per dollar on Monday. The gap between the official and black market rates has expanded, with some traders quoting the dollar at ₦1,550-$1,563 per dollar in the black market. The Central Bank of Nigeria’s interventions in the foreign exchange market have played a role in stabilizing the naira.¹ ²

 Global Market Trends: US Dollar’s Decline

At the same time, the US dollar has been facing challenges globally, remaining near its lowest point since February 2022. The dovish comments from Federal Reserve Chair Jerome Powell and the possibility of interest rate reductions have negatively impacted the dollar. The dollar index, which assesses the greenback against six major currencies, increased slightly to 96.744 but stayed within the overnight range. Traders are attentively monitoring the US non-farm payrolls report and news regarding Trump’s extensive tax-and-spending plan, which could potentially add $3.3 trillion to the national debt.

Economic Implications and Future Outlook

The naira’s strength in the official market may offer some relief to importers and businesses; however, the nation’s debt has risen due to a weakened naira, increasing by N27.72 trillion over the past twelve months to reach N149.39 trillion. President Bola Tinubu’s endorsement of four significant tax bills is intended to attract investors, enhance revenue, and improve the country’s tax-to-GDP ratio. Nevertheless, fiscal pressures continue to burden the budget, and the federal government is increasingly relying on concessionaire financing and public-private partnerships to lessen its dependence on external borrowing.

The recent increase in the naira’s value within the official market represents a favorable advancement for Nigeria’s economy; however, the nation’s debt levels and fiscal challenges continue to be a source of concern. Additionally, global market dynamics, particularly the depreciation of the US dollar, are expected to persist in influencing the naira’s worth and the overall economic forecast for Nigeria.