On June 1, 2025, the Nigerian Naira weakened significantly in the parallel market, closing at N1,630/$1 on May 30, 2025, down from N1,620/$1, ending a brief period of stability, according to Nairametrics Research. The currency also depreciated against the British pound, closing at N2,190/£1 on Friday, compared to N2,170/£1 on Thursday, and against the euro, falling to N1,835/€1 from N1,820/€1 earlier in the week. In contrast, the Naira gained against the pound midweek, reaching N2,135/£1 on Thursday from N2,155/£1. In the official market, the Naira appreciated slightly to N1,585.5/$1 on Friday from N1,587/$1, with Central Bank of Nigeria (CBN) data showing fluctuations between N1,583/$1 and N1,592/$1 during the week. At the current exchange rate of N1,579/$1, the parallel market rate reflects a premium of about 3.3% over the official rate.
The Naira’s volatility is exacerbated by OPEC+’s announcement of a 411,000 barrels per day production increase for July 2025, part of a gradual 2.2 million barrels per day adjustment starting April 2025. Nairametrics Research warns that this could depress global oil prices, threatening Nigeria’s forex earnings, given oil accounts for over 90% of export revenue. The African Development Bank (AfDB) projects a 6% Naira depreciation by 2026, citing global market volatility, contradicting CBN Governor Olayemi Cardoso’s claim of reduced forex volatility below 0.5%. Posts on X, including from @Nairametrics, highlight concerns about the Naira’s stability amid OPEC+’s decision and a 4.9% non-performing loan rate noted by Fitch Ratings.
Despite CBN interventions, such as clearing a $7 billion forex backlog and maintaining the Monetary Policy Rate at 27.5%, the Naira faces pressure from dollar demand and speculative trading. The narrowing gap between official and parallel market rates, now at about 3%, signals some reform success, but analysts warn of risks from global oil dynamics and domestic inflation.
