For the first time in over a week, the Naira recorded a slight gain against the United States dollar at the official foreign exchange market.
On Thursday, August 21, 2025, the Central Bank of Nigeria (CBN) reported that the Naira traded at N1,535.78 to the dollar, compared to N1,536.73 on Wednesday. This marks a marginal appreciation of N0.95, or about 0.062 percent, offering a small relief for the local currency that has faced continued pressure in recent months.
This is the Naira’s first appreciation since Friday, August 15, breaking a week-long stretch of declines and stagnation.
While the change may appear small, it is being viewed by financial analysts as a positive signal that market pressures may be easing, at least temporarily.
In contrast, the parallel or “black” market — where a large portion of foreign exchange trading takes place due to limited dollar supply from banks remained unchanged at N1,550 per dollar on Thursday.
This gap between the official and black-market rates continues to reflect demand pressures in the economy, with many businesses and individuals still unable to access dollars at the official rate.
One of the encouraging signs for the economy is the continued growth in Nigeria’s external reserves.
As of Wednesday, August 20, the CBN reported that the country’s foreign reserves had risen to $41.05 billion, up from $38.25 billion on July 21 — an increase of nearly $3 billion in one month.
Analysts say the increase in reserves is a critical factor that could help support the Naira, especially if the CBN uses part of it to intervene in the forex market.
The rise in reserves may be linked to recent higher oil prices, improved remittances, and foreign investment inflows, though the CBN has not provided specific details.
Since the government floated the Naira in June 2023 — removing the previous fixed exchange rate system — the local currency has experienced significant volatility. While the move was praised by international financial institutions like the International Monetary Fund (IMF) and World Bank for promoting transparency, it has also made the currency more vulnerable to market forces.
In the last year, the Naira has lost over 50% of its value, falling from around N750/$1 in mid-2023 to over N1,500/$1 in August 2025.
The Central Bank, under the leadership of Governor Olayemi Cardoso, has been under increasing pressure to stabilise the currency and bring inflation under control.
One of the key strategies has been to build up foreign reserves, attract more foreign investments, and tighten monetary policy to reduce demand for dollars.
While Thursday’s appreciation has been welcomed by some as a step in the right direction, many Nigerians remain cautious.
“I’m happy to see the Naira gain a bit, but unless this becomes a consistent trend, it won’t mean much,” said Chinedu Okafor, a Lagos-based importer. “The cost of importing goods is still very high, and we need more access to dollars at official rates.”
Others believe the government needs to go beyond temporary gains and address the root causes of Naira instability, including low production, dependence on imports, and uncertainty in fiscal policies.
A stronger Naira, if sustained, could help reduce the prices of imported goods, lower inflation, and improve investor confidence in the Nigerian economy. It could also reduce the burden on businesses that rely on foreign exchange to import raw materials or finished products.
However, experts caution that the slight gain recorded on Thursday is not yet a trend and should be seen as a momentary development rather than a long-term shift.
The coming weeks will be critical in determining whether this gain is the beginning of a recovery for the Naira or just a temporary blip.
Market watchers will be keeping an eye on the CBN’s actions, especially how it manages the growing reserves, handles forex interventions, and engages with international financial partners.
For now, Thursday’s improvement gives a small but welcome breather to a currency that has been under sustained pressure and provides a sliver of hope to businesses and citizens alike.
