The Nigerian naira recorded another day of gains in the official foreign exchange market on Wednesday, May 22, 2025, continuing a modest upward trend that began earlier in the week. According to data released by the Central Bank of Nigeria (CBN), the currency appreciated to ₦1,583 per US dollar, improving slightly from Tuesday’s closing rate of ₦1,588.5/$1.
This marks the third straight day of appreciation for the local currency, which started the week at ₦1,597/$1 on Monday. In intra-day trading, the naira fluctuated between a high of ₦1,590/$1 and a low of ₦1,582.5/$1, settling at a simple average rate of ₦1,584.25/$1.
In the official cross-currency exchange, the naira traded at ₦2,126.23 against the British pound and ₦1,795.07 per euro.
Parallel Market Snapshot
In the unofficial or parallel market, the naira maintained stability, closing at ₦1,625/$1 on Wednesday—the same rate observed the previous day—according to market sources in Lagos. On Monday, the naira had closed at ₦1,627/$1.
For other major currencies in the parallel market, the naira traded at ₦2,155/£1 on Wednesday, slightly stronger than Tuesday’s ₦2,145/£1 and Monday’s ₦2,142/£1. Against the euro, the naira exchanged at ₦1,820/€1 on both Monday and Wednesday, with a marginal increase to ₦1,825/€1 recorded on Tuesday.
External Reserves See Positive Movement
Nigeria’s external reserves rose slightly to $38.53 billion as of Tuesday, up from $38.50 billion the previous day, according to CBN data. The increase reflects a broader trend of recovery in the reserves, despite previous months of volatility.
CBN Governor Olayemi Cardoso, speaking at the Monetary Policy Committee (MPC) meeting on Tuesday, remarked that “recent monetary reforms are starting to yield positive results.” He credited the uptick in reserves to growing investor confidence and renewed interest from market participants who had previously stayed on the sidelines. He noted that this resurgence has helped stabilize the naira, which is now trading within a range of ₦1,590/$1 to ₦1,610/$1 in 2025.
“Recent monetary reforms are starting to yield positive results,” Cardoso said.
CBN data also reveals that Nigeria’s foreign reserves began the year on a strong footing, surpassing $40 billion in January. The peak was recorded on January 20 at $40.15 billion. However, by February 18, reserves had dropped to $38.82 billion, marking a decline of over $1.3 billion in one month.
This downward trajectory continued through March, hitting $38.35 billion on March 7 and $38.31 billion by March 28—a loss of $260 million in under two weeks. Analysts attributed the decline to weakening global oil prices, increased external debt servicing, and heightened demand for foreign exchange.
April saw further dips, with reserves falling below $38 billion and fluctuating between $37.79 billion and $38.08 billion. A reversal of this trend began in May, with reserves climbing to $38.12 billion by May 9, $38.21 billion by May 12, and reaching $38.38 billion by May 16—representing a $260 million increase in just seven days.
Cardoso also disclosed a sharp rise in Nigeria’s net external reserves, which he described as a more precise indicator of available foreign assets. According to him, reserves increased from just over $3 billion to nearly $23 billion.
He described this increase as a “quantum leap,” driven by improved transparency in reserve reporting, greater investor confidence, and renewed activity in the FX market.
Broader Economic Outlook
In its latest Nigeria Development Update report, titled “Building Momentum for Inclusive Growth,” the World Bank acknowledged progress in the country’s macroeconomic environment. The report attributes the improvement to a series of fiscal and monetary policy reforms introduced by the federal government.
The World Bank notes that this improvement in economic activity was largely underpinned by sustained policy reforms and improved revenue mobilisation.
As the naira shows signs of relative stability and foreign reserves begin to rebuild, the combination of policy measures appears to be fostering a more favorable economic outlook for Nigeria in 2025.
