Market News

By Oluwakemi Abimbola

The naira closed trading at 1,529.22/$ at the official Nigerian Foreign Exchange Market window on Tuesday. According to data on the Central Bank of Nigeria’s website, Tuesday’s closing was weaker than 1,528.33/$ from Monday.

This marginal weakness comes on the heels of the resumption of international transactions on their naira cards.

Days ago, some banks, including United Bank of Africa, Wema Bank, GTBank and FirstBank announced the resumption of the service with limits ranging from $1,000 per quarter to $500 every month.

The move had been expected to increase demand for forex in a market that has been largely stable. At the parallel market, CardinalStone reported that the naira remained unchanged at N1,540/$.

In its mid-year review, the CardinalStone analysts projected the naira to “remain largely range-bound in H2’25 at N1,550.00 — N1,635.00/$.”

In the first half of the year, the analysts said that Naira stability was threatened due to elevated global risk-off sentiments triggered by US trade policies and heightened geopolitical tensions.

“These external shocks led to FX outflows of $22.83bn, as some investors shifted capital to US Treasuries and Gold. In response, the CBN was active in the FX market, selling $4.72bn in the period,” they said.

Dismissing concerns about the interventions, CardinalStone said, “We do not believe these interventions signalled a return to a fixed exchange rate regime or reflect an attempt to target a specific level for the naira. Rather, the current FX framework allows for discretionary interventions in the presence of perceived market distortions.

“Moreover, it is clear that the distortions witnessed in H1’25 largely stemmed from global factors and not idiosyncratic factors, as the CBN has taken steps to improve transparency.

“The bank’s average monthly FX intervention came in at $786.58m, materially lower than the $2.30bn pre-COVID and $1.38bn post-COVID levels previously used to defend the Naira at unsustainable levels, despite underlying macro weaknesses. Encouragingly, both local and international observers now generally agree that the Naira is trading close to its fair value.”