Lagos, Nigeria – Naira just show small improvement as e close trading for Wednesday. E appreciate by 0.16 percent to 1530.52/$ from 1532.93/$ wey e dey before, according to data wey come from Central Bank of Nigeria (CBN). For this trading session, naira don reach as high as 1545/$ and drop as low as 1500/$, wey be lower than Tuesday wey don pass. For parallel market, CardinalStone Research report say naira remain steady for 1,585.00/$, which dey widen the gap for speculative traders.
As per analysts wey dey follow this development, dem talk say the space between official and parallel market rates don reduce to about 3.07 percent from 3.40 percent wey e be at the start of the week. Even though naira don fall small, observers say the market dey stabilize due to structural reforms and increase for forex inflows.
Speaking about this matter, Chief Executive Officer of CFG Advisory, Tilewa Adebajo, tell The PUNCH say, “We really need to change our mindset about the exchange rate. The reason we are seeing some stability na because of the new system wey allow everybody to use one portal to buy and sell dollars or any currency. Most people wey dey abroad now dey use app when dem want to transfer money to Nigeria. When dem use the app, e go give dem their official rate, do the transfer and settle everything.”
Adebajo also say, “People never really dey used to the new system wey don change for better. The parallel market operators never catch up with this change. Plenty of money wey dey enter Nigeria now dey come through this platform, so the supply dey okay. Wetin remain na for parallel market operators and Bureau De Change to also adapt to this way. Once dem do am, we go enter wetin dem call price discovery. CBN no be the major supplier of dollars to the market anymore, wey be good sign. Our forex system don evolve, but many people still no understand this evolution.”
Comercio Partners also praise the naira stability for the past few time. Dem note say naira dey hold steady for N1,450 – N1,550 range against dollar, wey dey help control import costs wey suppose don dey skyrocket before this time. According to their research, “While we acknowledge short-term gains, we still dey caution say sustained stability go depend on policy consistency and steady forex inflows. Nigeria long-term stability go rely on forex inflows, competitive market dynamics, and CBN need to dey sharp. One policy mistake fit scatter everything back to square one.”
Experts from CardinalStone echo similar sentiments saying, “Since the beginning of dis year, the FX rate don dey relatively stable, thanks to CBN efforts, positive current account position, and increase for foreign inflows. But di outlook dey face risk from weaker global crude oil prices wey fit affect Nigeria FX stability and increase inflation worries.”
So far, Brent crude prices don drop by 5.5 percent year-to-date due to expectations of rising global supply and policy shifts. U.S. dey push to increase oil production, wey lead Energy Information Administration (EIA) to revise 2025 crude production forecast up to 13.61 mbpd from 13.55 mbpd. OPEC+ don also confirm decision wey dem make for December 2024 to gradually unwind 2.20 mbpd voluntary production cuts starting April 1, 2025. Dis move fit add to supply and push oil prices down.
With the way crude prices dey drop and potential supply increase, analysts dey warn say Nigeria forex stability still dey vulnerable to external shocks.
