Naira records one-month gain of N105 in black market

…closes at N1,512/$ at NFEM on Monday

The naira on Monday appreciated against the dollar in one month, gaining N105 year-to-date in the parallel market, popularly called black market.

Data collated from the online trading platforms and street traders showed that the naira rose by 6.7% as the dollar was quoted at N1,560 on Monday compared to N1,665 quoted at the beginning of the month at the black market.

The market has been calm, demand has reduced and there are more dollars in the market, “Mohammed Musa, a street trader said. Yusuf Dan Umma, said “We are buying dollars for N1540 and sell at N1560.

At the official market, the naira strengthened against the dollar by 1.8% between January and February 2025.

At the end of trading on Friday the naira gained N27.50 as the dollar traded for N1,511 as against N1,538.50 traded at the beginning of the month at the Nigeria Foreign Exchange Market (NFEM), according to data from the Central Bank of Nigeria (CBN).

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On a day-on-day basis, the local currency closed flat at N1,512 on Monday from N1,511 on Friday and N1,515 on Thursday at NFEM. Currency dealers quoted the dollar at the highest rate of N1,515 on Monday, slightly higher than N1,520 quoted on Friday, at NFEM.

The market recorded the lowest rate of N1,504 on Monday compared to N1,500 per dollar on Friday and N1,501/$1 on Thursday at the NFEM.

Nigeria’s external reserves, on a steady decline, have dropped to $39.09 as of February 13, 2025 from $40.88 recorded at the beginning of the year.

Murtala Sabo Sagagi, member of the Monetary Policy Committee (MPC) said, the exchange rate improved from N1,660.33/US$ on September 24, 2024, to N1,647.47/US$ by the end of October 2024, while the overall balance of payments recorded a surplus of US$2.47 billion in Q2 2024, from a deficit of US$0.95 billion in Q1 2024.

The CBN said in its economic report that the net FX flows through the economy rose to $5.95 billion as of November 2024 compared to $1.7 billion in the corresponding period of November 2023.

The net FX flow is the difference between the total inflows and outflows of foreign exchange. A positive net FX flow indicates that more foreign currency is entering the economy than leaving, which can strengthen the country’s foreign reserves and exchange rate.