Naira Gains Stability But Caution Needed, Rewane Warns

The Naira has maintained stability in the foreign exchange market, gaining value against the US dollar. Data from the Central Bank of Nigeria (CBN) shows the Naira closed at N1,502.50 per dollar, reflecting a 0.56 percent appreciation compared to N1,511 the previous week.

In the parallel market, also known as the black market, the Naira strengthened to N1,510 per dollar on Thursday and Friday, marking a gain of N45 from the N1,555 recorded the previous week. These improvements come as the market records a convergence of exchange rates not seen in two years.

Rewane Warns Against Overconfidence

Despite these gains, financial analyst Bismarck Rewane has cautioned policymakers not to be too optimistic. The managing director of Financial Derivatives Company (FDC) noted that the Naira’s quick appreciation is temporary and could reverse if not managed properly.

“We’re seeing that the Naira is strengthening, but with caution. Let’s not be too hasty because it’s going to correct itself,” Rewane said in a presentation on Channels Television on Friday.

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He explained that Nigeria has spent significant resources to maintain the Naira at its current level. “There are many things that are happening: reserves of over $40 billion are coming down. We’ve also borrowed $4 billion in bond issues. When you look at all of that, we’ve almost spent $8 billion to support the Naira at the current levels,” he revealed.

Foreign Reserves Decline Raises Concerns

While the Naira remains stable, Nigeria’s external reserves have been declining steadily. The reserves have shed over $3 billion this year, raising concerns about how long the CBN can sustain its support for the currency. Analysts believe that if reserves continue to fall, it could put renewed pressure on the Naira.

Authorised currency dealers quoted the dollar at the highest rate of N1,509 on Friday, which was stronger than the N1,520 recorded the previous week. The market recorded its lowest rate at N1,491 per dollar on Friday, showing a more stable exchange range compared to previous fluctuations.

Reforms and Inflation Control Help Naira’s Strength

The Naira has been on a positive trajectory since December, following policy changes by the CBN aimed at improving efficiency and transparency in the market. These reforms, coupled with easing inflationary pressures, have helped stabilize the currency.

Rewane acknowledged that while risks remain, some economic indicators show positive signs. “On the bright side, the Nigerian Naira has appreciated by 9 percent in 2025, inflation pressures are easing, and GDP growth is positive. Petrol and diesel prices are cooling, and the Purchasing Managers’ Index (PMI) is expanding,” he said.

Outlook for the Naira

Experts suggest that the Naira’s future stability will depend on Nigeria’s ability to sustain its foreign reserves and implement economic policies that support long-term growth. While recent gains are encouraging, the overall forex market remains unpredictable.

Rewane’s warning underscores the need for caution. While the Naira has strengthened, the country’s economic fundamentals must remain strong to prevent another round of depreciation. The coming months will be crucial in determining whether the Naira can maintain its gains or face renewed volatility.