Market News

Hope Moses-Ashike 

…Say exchange rate gap disappearing

The naira has stabilised at a more sustainable level, with the gap between the official and parallel market exchange rates disappearing, thanks to disciplined reforms undertaken by the Central Bank of Nigeria (CBN), according to Olayemi Cardoso, apex bank’s governor.

Speaking at the conclusion of the 2025 Spring Meetings of the International Monetary Fund (IMF) and the World Bank Group in Washington D.C. weekend, Cardoso attributed these positive developments to the government’s steadfast commitment to reforms and greater policy clarity.

“Again, thanks to disciplined reforms and policy clarity, the naira has stabilised at a more sustainable level against the U.S. dollar. The once-wide gap between the official and parallel market rates has all but disappeared, a first in Nigeria’s recent history, and speculative arbitrage has all but vanished,” Cardoso said, noting that the measures implemented have significantly curtailed market distortions.

On Friday, the naira strengthened against the dollar across various segments of the foreign exchange (FX) markets, a development bolstered by improved liquidity conditions. This progress mirrored the recent assessment by the World Bank, which affirmed the growing stability of Nigeria’s local currency.

At the Nigerian Foreign Exchange Market (NFEM), the naira closed the trading week steady at N1,599.54, concluding four days of trading, according to data from the CBN. This figure represented a slight improvement from the previous week’s closing rate of N1,599.79. Similarly, in the parallel market, commonly known as the black market, the naira also remained stable, closing at N1,605 on Friday, a rate that had been consistently maintained since Wednesday.

Cardoso further explained that this renewed currency stability has played a critical role in restoring investor confidence and encouraging autonomous inflows through formal financial channels. He stressed that these inflows are helping to diversify Nigeria’s foreign exchange sources beyond the traditional reliance on oil revenues.

“Nigeria’s external buffers have also strengthened considerably,” he added. “Our foreign reserves now exceed $38 billion, providing nearly 10 months of import cover. This robust buffer enables us to better withstand external shocks whether from declining oil prices or global financial turbulence thereby safeguarding our economy.”

Highlighting the improvement in Nigeria’s external accounts, Cardoso noted that in 2024, the country recorded a balance of payment surplus of $6.83 billion, marking the strongest performance in many years. This achievement, he said, was driven by rising exports and renewed capital inflows. At the same time, efforts to bolster the financial sector are gaining traction. He said that the banking sector recapitalisation exercise is progressing well, with strong momentum and the backing of key stakeholders, which will ensure that Nigerian banks are better equipped to support the real economy with greater scale, stability, and capacity.

Cardoso also noted that Nigeria’s reform trajectory received broad support from development partners. According to him, feedback from global investors and the Nigerian diaspora has been overwhelmingly positive, reflecting growing confidence in the country’s economic direction.

“Nigeria is increasingly recognised as a rising economic force, admired for the resolve shown in implementing difficult but necessary reforms,” he said. “These achievements, while encouraging, only strengthen our resolve to press forward. We will not be complacent. Instead, we will redouble our efforts to ensure these positive trends are sustained.”

Also speaking to journalists on the outcomes of the Spring Meetings, Wale Edun, minister of finance and coordinating minister of the economy, underscored the strong endorsement Nigeria’s reforms have received from the international community.

He said that the reforms are widely viewed as the most credible pathway to achieving lasting economic prosperity.

Edun disclosed that the U.S. State Department described Nigeria’s reform efforts as an ‘economic miracle,’ a recognition of the scale and impact of the changes being implemented.

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He highlighted that there is currently a strong global appetite for investments in Nigeria, noting that the International Finance Corporation’s (IFC) continued investments in the country serve as a strong signal that would likely attract even more investors to the Nigerian private sector. Edun stressed that fiscal consolidation remains a critical element of Nigeria’s policy framework at this time, aimed at ensuring macroeconomic stability and sustainable growth.

He pointed out that Nigeria fully aligns with the overarching theme of the 2025 World Bank Group/IMF Spring Meetings, which is that job creation is the surest pathway to poverty reduction and the improvement of livelihoods. According to him, discussions at the meetings also revealed key areas of interest for future collaboration, particularly U.S. interest in investments in Nigeria’s natural gas sector, with a specific focus on the Nigeria-Morocco Gas Pipeline project.