Emmanuel OchayiThe Nigerian naira has shown signs of stability in recent weeks, but the foreign exchange (FX) market remains uncertain as we enter a new trading week from March 3rd to March 8th. Analysts and traders are closely watching the market to understand whether the recent appreciation of the Naira in the parallel market will continue or if new pressures will cause a decline.
In February 2025, the naira recorded a 6% appreciation in the parallel market, moving from N1,600 per dollar to N1,500 per dollar. However, in the official market, the currency weakened by 1.6%, reflecting the delicate balance between different market forces. This stability has been attributed to increased forex supply, the return of foreign investors, and rising crude oil production.
Join our WhatsApp ChannelDespite these gains, many experts warn that the naira remains vulnerable. The Central Bank of Nigeria (CBN) has maintained its monetary policies to control inflation, but some analysts believe the stability of the naira is tied more to foreign portfolio investments than to strong economic fundamentals.
What does this mean for Nigerians in the coming week? Will the naira maintain its current trajectory, or will new economic realities cause a shift? We spoke to Nigerian citizens and financial experts to understand their expectations.
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The Naira’s Stability Faces New Tests
The naira’s relative stability has given some hope to businesses and individuals, but market watchers are cautious. The CBN’s recent decision to extend Bureau De Change (BDC) access to the official forex market until May 30, 2025, has played a major role in boosting liquidity. With BDC operators allowed to purchase $25,000 per week, the supply of forex in the parallel market has improved, helping to close the gap between official and black-market rates.
However, some experts fear this stability may not last. Dr. Tunde Ojo, an economist at Lagos Business School, explained that the naira’s value is still dependent on external factors. “The naira’s strength in the black market is good news, but it’s fragile. If foreign investors withdraw funds or oil prices drop significantly, we could see another sharp decline. The economy still lacks strong fundamentals to support a stable exchange rate.”
This concern is shared by many forex traders and business owners who depend on a stable exchange rate for their operations.
Nigerians React to the Forex Market Trends
Many Nigerians remain sceptical about the naira’s performance, despite recent improvements. Kunle Ajayi, a car dealer in Lagos, told us that he is watching the market closely before making major business decisions. “Last year, I lost a lot of money when the naira fell suddenly. Now, I don’t know what to expect. If the price of the dollar drops further, I might hold off on buying imports. But if it rises again, I’ll have to buy at a loss.”
For business owners like Kunle, the uncertainty in the naira-dollar exchange rate makes planning difficult. This unpredictability has affected traders who import goods and services from abroad.
Meanwhile, Okar Chidinma, a fashion designer, said she has slightly adjusted her pricing strategy due to the recent appreciation of the naira. “Last month, I had to increase my prices because my fabric suppliers charged more due to the exchange rate. But now that the Naira is doing better, I’m hoping costs will go down, even if just a little.”
Nigerians who rely on forex for business or personal use are hoping that the Naira’s stability will hold in the coming weeks.
Foreign Investors and Crude Oil Prices Could Shape the Week
One of the key reasons for the naira’s relative stability has been the return of foreign portfolio investors. With Nigeria’s Treasury Bills and bonds attracting more interest, experts believe that forex inflows from investors will help maintain liquidity.
Dr. Opeyemi Salami, a financial analyst at Zenith Bank, explained that these inflows are critical in determining the naira’s direction this week. “Foreign investors are returning because they see opportunity, but they can also leave quickly if they sense risk. The government must ensure economic policies remain attractive to sustain these investments.”
Another important factor is Nigeria’s crude oil production. In January 2025, crude oil output increased to 1.7 million barrels per day, providing more forex earnings. The CBN has relied on these earnings to stabilise the currency, but any drop in oil prices could put pressure on the Naira.
Will the Naira Hold or Weaken This Week?
As Nigeria enters a new week, all eyes will be on the FX market to see if the naira will sustain its current performance or face new pressures. While increased forex supply and foreign investment inflows are positive signs, analysts warn that economic fundamentals must improve for long-term stability.
For Nigerians, the uncertainty remains. Chibuzo Nwankwo, an IT professional in Port Harcourt, expressed mixed feelings about the Naira’s future. “I don’t know if we should celebrate just yet. We’ve seen the Naira gain before, only for it to crash again. Until Nigeria has a stronger economy, I think we will keep going in circles.”
Many Nigerians share his cautious optimism. While the naira has performed better in recent weeks, the coming days will determine whether the trend continues or if new challenges arise.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
