Dollar crashes across FX markets as speculators lose

…external reserves decline $1.13bn

The dollar crashed sharply across foreign exchange (FX) markets in the last two days, after the Central Bank of Nigeria launched the FX code in the Nigerian Foreign Exchange Market (NFEM).

In the official market, the naira gained 1.5% or N22.91 as the dollar was quoted at N1,510.72 on Wednesday compared to N1,533.63 quoted on Monday before the launch of the FX code, data from the FMDQ Securities Exchange Limited indicated.

This was computed based on FMDQ Exchange FX closing rate methodology using data from Bloomberg BMatch.

Compared with N1,531.20 on Friday, the naira appreciated by N20.48, marking a 1.35% gain within three trading days in the NFEM. On a day-on-day trading the naira strengthened by 0.79% or N11.96 on Wednesday from N1,522.68 closed on Tuesday at NFEM, according to data from the FMDQ.

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The local currency closed at N1,625 in the parallel market, popularly called black market, on Wednesday, a day after the Central Bank launched the FX code in the market.

The naira gained 0.55% or N9 on Wednesday as the dollar traded for N1,625 as against an average rate of N1,634 quoted on Tuesday in the black market.

Nigeria’s external reserves have declined by $1.13 billion year-to date to $39.79 billion as of January 28, 2025 from the peak of $40.92 billion as of January 6, 2025, data from the CBN showed.

The CBN has released a new FX Code aimed at enhancing liquidity, transparency and guiding market participants in Nigeria’s foreign exchange sector.

The code represents a set of principles widely recognised as good practices in the global foreign exchange market. The CBN, in its regulatory and supervisory role, crafted the FX Code to address risks in Nigeria’s evolving financial landscape while strengthening the integrity and functionality of the foreign exchange market.

Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.