Naira edges up against Dollar at official, parallel markets

The Nigerian naira experienced a slight recovery against the US dollar on Wednesday, January 22, 2025, providing a glimmer of hope amidst ongoing currency challenges.

According to data from the FMDQ Securities Exchange, the naira appreciated marginally to N1,552.58 per dollar, a modest gain of N0.20 compared to the previous day’s closing rate of N1,550.78.

This minor improvement suggests a stabilization in the official exchange rate, although experts caution against reading too much into this single day’s movement.

The naira also saw a more significant gain in the parallel market, commonly referred to as the black market. It closed at N1,660 per dollar, a notable improvement from the previous day’s rate of N1,670.

This represents a gain of N10 for the local currency, offering some relief to individuals and businesses reliant on the parallel market for foreign exchange.

READ ALSO: Naira weakens further, depreciates against across all markets

Dr. Johnson Chukwu, CEO of Cowry Asset Management: “This marginal appreciation is likely a temporary blip. The fundamental factors driving the naira’s weakness, such as low foreign exchange inflows and high import demand, remain largely unchanged. A sustainable recovery requires a comprehensive set of policy measures to address these underlying issues.”

Mr. Olusegun Oni, Chief Economist at Zenith Bank: “While the appreciation is a positive sign, it’s crucial to monitor the situation closely. The volatility of the exchange rate has been a major concern for the Nigerian economy. The government needs to implement policies that attract foreign investment, boost exports, and improve the country’s overall economic competitiveness to ensure long-term stability in the currency market.”

While the naira’s slight appreciation on Wednesday offers a temporary respite, experts emphasize the need for a comprehensive and sustained approach to address the underlying factors driving currency weakness.

The government’s ability to implement effective policies that improve economic fundamentals will be crucial in determining the long-term trajectory of the naira.