LAGOS, Nigeria — May 3, 2025, naira, posted modest gains against the world’s major currencies (Dollar, Pounds, Euro and Chinese yuan) on Friday, offering a brief window of optimism in an otherwise tense and uncertain foreign exchange landscape. The currency market movements, although minor, have drawn considerable attention from economic analysts, traders, and international observers due to the continued volatility of Nigeria’s foreign exchange regime.
Data from google finance channels show that the naira strengthened by 0.24% against the U.S. dollar and 0.48% against the British pound sterling. Analysts point to short-term shifts in foreign currency demand, improved liquidity conditions, and strategic interventions by the Central Bank of Nigeria (CBN) as primary drivers of this slight appreciation.
On May 2, 2025, the U.S. dollar exchanged at ₦1607.66. As of May 3, it was trading at ₦1603.83, a modest but measurable improvement for the local currency. Likewise, the British pound, which previously stood at ₦2137.74, dropped to ₦2127.56, allowing the naira to recover slightly against the pound. While these movements may appear marginal, they represent a rare instance of dual strengthening, which has been uncommon in Nigeria’s forex environment.
Foreign exchange markets in Nigeria have experienced turbulent conditions over the past year, driven by macroeconomic imbalances, inconsistent policy communication, and ongoing external pressures. The naira has often struggled to maintain parity with global currencies, in large part due to declining oil revenues, dwindling foreign reserves, and sluggish investor inflows.
“This is not a sign of long-term strength,” said one senior economist at a Lagos-based investment firm. “Rather, it’s a reflection of temporary adjustments. Structural challenges—including low foreign direct investment, high import dependency, and a widening fiscal deficit—continue to weigh on the naira.”
One of the most significant challenges remains the persistent gap between official and parallel market exchange rates. Due to chronic dollar shortages in the formal banking system, many businesses and individuals have turned to Bureau de Change (BDC) operators to access needed foreign currencies. As of May 3, 2025, the exchange rate for the euro stood at ₦1816.90 per €1, while the Chinese yuan remained stable at ₦220 per ¥1.
The CBN has pledged to adopt a range of tools to stabilize the naira. These include increasing transparency in forex transactions, attracting diaspora remittances through incentive programs, and implementing policies aimed at boosting foreign reserves. Still, critics argue that such measures are inadequate without broader reforms targeting Nigeria’s structural economic weaknesses.
“The CBN is doing what it can within a limited policy space,” said a currency strategist based in London. “But without comprehensive fiscal discipline and export diversification beyond crude oil, the naira will remain exposed to both internal and external shocks.”
Nigeria’s import-dependent economy further complicates its currency management. Essential commodities, machinery, pharmaceuticals, and even food items rely heavily on foreign supply chains. When forex access becomes constrained, inflation rises, business operations slow, and economic inequality deepens.
