Naira Stability Streak Trades At N1490/$1 In Black Market: All You Need To Know

For a while now, "Naira depreciates" hasn’t dominated the headlines, and that’s a reason to celebrate as the Naira is still on a winning streak. On February 27, the Naira flexed its muscles once again, gaining ₦5 to trade at ₦1,490/$1 in the Black Market, compared to last week's ₦1,565/$1. While official figures are yet to be released, this jump is making waves in financial circles.

If you're wondering what’s fueling this unexpected streak, let’s break it down by answering some key questions:

Q: The Naira has been making gains recently. What’s happening?

A: Yes! The Naira has been showing remarkable resilience. As of February 27, it traded at N1,490/$1 in the Black Market—strengthening from last week's N1,565/$1. This steady improvement signals a positive shift in Nigeria’s foreign exchange market.

Q: What’s driving the Naira’s stability?

A: Several key policies initiated by the Central Bank of Nigeria (CBN) have contributed to this trend:

• Increased Forex Liquidity: To ease foreign exchange shortages, the CBN has injected significant dollar liquidity into the market. In January 2024, the CBN injected $500 million to clear forex backlogs, improving liquidity and transaction flow. Additionally, in January 2025, the Federal Government cleared a $7 billion forex backlog, making fund repatriation easier for businesses, multinationals, and foreign investors.

• Stronger Diaspora Remittances: The CBN has introduced policies to formalize remittance inflows, such as the introduction of the Non Resident Nigerians BVN, then the Introduction of the Non Resident Nigerian Ordinary Accounts (NRNOA) and Non Resident Nigerian Investment Accounts (NRNIA). More inflows mean less pressure on the Naira enhancing stability.

• CBN’s Crackdown on Speculation: The CBN has tightened regulations on Bureau de Change (BDC) operators. Under new guidelines, BDCs can only purchase a maximum of $25,000 per week from a single authorized dealer bank. This limits speculation, increases transparency, and curbs artificial dollar demand.

• Policy Reforms & Market Efficiency: In October 2024, the CBN released revised guidelines for the Nigerian Foreign Exchange Market, consolidating all FX windowsand redefining the roles of market participants. These measures aim to address long-standing inefficiencies and create a transparent, well-regulated system.

Q: How is the foreign exchange market performing now?

A: According to Financial Analyst and quoting Zeal Akaraiwe on Arise Global Business Report on Wednesday February 27th, 2025 “ The CBN is involved in the market but the level of involvement has reduced so much that the foreign exchange market is now 'better able to sustain itself, indicating a healthy market where cash flow matches divestments. And the CBN now comes in only when there is distortion”

Q: Have CBN’s actions had any measurable impact?

A: Yes. Inflows from International Money Transfer Operators (IMTO) increased by 63.7%, marking the highest level in nine months. This surge has further strengthened the forex market, contributing to the Naira’s stability.

IMTOs facilitate money transfers into Nigeria from abroad. Increased inflows support external reserves and enhance economic stability.

Q: Should we expect continued stability for the Naira?

A: So far, the outlook remains positive as the CBN is keen on maintaining currency stability. With sustained reforms, effective forex policies, and increased investor confidence, the Naira is on a path to continued stability. However, continuous monitoring and strategic interventions will be key to maintaining this progress.

Q: What does a stable Naira mean for everyday Nigerians?

A: It has several benefits:

• Lower Prices on Imported Goods: A stronger Naira means lower costs for imported items like food, fuel, and electronics.

• Cheaper Business Operations: Businesses importing materials will see reduced expenses, which could lead to lower prices for consumers.

• More Jobs and Investments: With currency stability, foreign investors gain confidence in Nigeria’s economy, leading to increased job creation and business expansion.

The Naira’s stability is not just about numbers, it’s about a better future for Nigerians. As we move forward, the steps taken today ensure a more prosperous tomorrow.