Nigeria’s naira holds steady below the ₦1,600 mark, supported by low trading activity and renewed confidence among local business leaders.
Analysts point to stable demand, positive growth outlooks, and narrowing black-market gaps as signs of a maturing foreign exchange landscape.
Nigeria’s currency, the naira, maintained a steady position just below the ₦1,600 per dollar mark in the unofficial market on Tuesday, bolstered by reduced transaction volumes due to the recent public holidays and renewed economic optimism among local businesses.
Trading data showed the naira fluctuated between ₦1,587 and ₦1,590 early Tuesday, staying below the psychological resistance of ₦1,600. Analysts attribute the temporary market calm to the holiday-induced slowdown in Lagos, Nigeria’s commercial capital.
According to the Central Bank of Nigeria (CBN), current sentiment among Nigerian businesses remains upbeat. Confidence is particularly high in agriculture and manufacturing, with many firms outlining expansion plans for the rest of 2025. Executives across sectors, including factories, trading hubs, and service firms, expect increased hiring and currency stability in the coming months.
Expert forecasts stable naira outlook
Renowned Nigerian economist Bismarck Rewane, CEO of Financial Derivatives Company, predicts the naira will continue to hover between ₦1,600 and ₦1,650 in the short term. Speaking at the June Lagos Business School breakfast session, Rewane noted that the naira still appears undervalued by nearly 27%, according to standard market benchmarks.
He pointed out that the global decline of the U.S. dollar, down 8.7% year-to-date, may provide further cushion for Nigeria’s local currency. Encouragingly, the notorious gap between the official and black-market exchange rates has now shrunk to a minimal 1–3% margin, compared to the massive 50–70% spread seen before recent CBN reforms. Rewane believes this tighter spread indicates the naira is now closer to its true market value.
Dollar stalls globally amid trade talks
Globally, the U.S. dollar is experiencing a lull. At the London trading session, it remained flat as investors awaited key inflation data and watched ongoing trade negotiations between U.S. and Chinese officials. The talks, centered on tariffs, chip exports, and student visas, are seen as a follow-up to the Geneva-mediated truce that recently calmed global markets.
The Dollar Index, which tracks the dollar’s strength against a basket of six major currencies, held steady at 98.99, slightly above last week’s six-week low. So far in 2025, the index has shed 9%, as market anxiety grows over rising U.S. inflation and economic uncertainty tied to President Trump’s final term.
UBS economist Dean Turner noted in a Monday report that global money managers are becoming more cautious about dollar exposure, citing volatile inflation, erratic trade policy, and political unpredictability in Washington as key risk factors. Turner acknowledged the change in sentiment, saying, “The dollar is no longer the world’s default safe haven,” but he refrained from advocating for a mass withdrawal from dollar assets.
Despite global jitters, Nigeria’s naira is showing resilience. With better-aligned monetary policies, stronger business confidence, and reduced pressure on foreign reserves, analysts believe the currency could continue its current path, stabilizing below ₦1,600, at least in the near term.
