Emmanuel OchayiDespite recent gains of the naira, concerns persist over the naira’s stability against the US dollar. Bureau De Change (BDC) operators say the local currency remains fragile due to devaluation pressures and market speculation.
The President of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadabe, said while the naira appreciated last week, its recovery is not guaranteed. “The naira appreciated significantly at the open market from a low of N1,580 per dollar to a higher level of N1,545 per dollar during the week. The CBN intervention at the EFEMS window has significantly boosted supplies, coupled with weaker demand in the market,” Gwadabe said.
Join our WhatsApp ChannelHowever, he warned that market resistance and speculation could reverse these gains.
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Market Volatility and Forex Attacks
ABCON previously described the naira as one of the most unpredictable currencies globally, blaming speculative activities and external economic pressures for its instability. “The forex market is under attack from speculative trading, global economic uncertainty, and policy inconsistencies,” Gwadabe said.
He also pointed to reduced trade volumes and increased compliance costs for BDCs following recent recapitalisation policies by the Central Bank of Nigeria (CBN).
CBN’s Role in Naira’s Stability
The CBN has implemented several measures to stabilise the exchange rate. Last year, it increased forex supply through the International Money Transfer Operators (IMTOs), which boosted remittance inflows to $600 million per month.
Daniel Okpara, a member of the University of Lagos Business School (ULBS) believes sustaining this trend is key to keeping the naira stable. “Nigeria’s foreign reserves now exceed $40 billion, and the government is targeting $1 billion monthly from remittances. These are positive indicators for the Naira,” he said.
Gwadabe, however, urged the CBN to maintain transparency in its forex policies. “To sustain the naira’s strength, the CBN should communicate policy changes effectively and avoid flooding the market with negative news,” he said.
Outlook for the Week
Analysts predict the naira will hover around N1,530 – N1,540 per dollar in the coming week, depending on forex supply and demand. The government’s 2025 budget projects an exchange rate of ₦1,400 per Dollar, but some experts, including Dr Uche Amadi, an economist, say this target is unrealistic. “Given current economic conditions, the exchange rate may remain above N1,500 for most of the year unless forex inflows increase significantly,” Uwaleke said.
While recent interventions have improved market confidence, experts warn that speculation and external economic factors still pose a risk to the Naira’s performance in the coming weeks.
