Naira Strengthens in Parallel Market
The Nigerian Naira has shown a significant appreciation, trading at N1,530 per dollar in the parallel market, up from N1,540 the previous day (February 21, 2025). However, in the official Nigerian Foreign Exchange Market (NFEM), the naira experienced a slight depreciation, moving to N1,502.5 per dollar from N1,496.
A key development this week has been the narrowing gap between the parallel and official exchange rates, signaling a positive trend for Nigeria’s currency stability.
Key Factors Driving the Naira’s Appreciation
Several elements have contributed to the recent rise in the naira’s value, including:
1. Increased Government Revenue
The Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service have reported significant revenue growth, collecting 1.4 trillion naira and 1.2 trillion naira, respectively.
- This increase in government earnings has bolstered the naira’s strength by improving Nigeria’s economic stability.
2. Economic Policy Reforms
The Nigerian government has implemented several strategic economic reforms, including:
- Unification of exchange rates
- Reduction in petrol subsidies
These measures are aimed at strengthening public finances and ensuring the long-term stability of the naira.
Market Reactions and Future Projections
Market analysts believe that the alignment of the parallel and official exchange rates reflects growing investor confidence in Nigeria’s economic direction.
However, projections suggest:
- By the end of this quarter, the naira could trade at approximately N1,567.48 per dollar.
- Within the next year, it may reach N2,011.32 per dollar.
Frequently Asked Questions (FAQ)
Q: What is the current exchange rate of the naira in the parallel market?
A: As of February 21, 2025, the parallel market rate is N1,530 per US dollar.
Q: How does the official exchange rate compare to the parallel market rate?
A: The official exchange rate stands at N1,502.5 per dollar, slightly lower than the parallel market rate of N1,530.
Q: Why is the naira strengthening?
A: The rise in government revenue and recent economic policy reforms have boosted investor confidence, leading to a stronger naira.
Q: Will the naira appreciate or depreciate in the future?
A: Analysts forecast the naira may reach N1,567.48 per dollar by the end of this quarter and potentially N2,011.32 per dollar within a year.
Stay updated on Nigeria’s economic developments by following reputable financial news sources and official updates from the Central Bank of Nigeria.
What do you think about the naira’s recent performance? Share your opinions in the comments section and join the discussion on Nigeria’s financial growth.
