How the naira rebounded from its lowest level in May

• The Nigerian currency has appreciated somewhat against the dollar successful the authoritative overseas speech market
• The naira, which deed its lowest astatine the opening of May, closed trading astatine N1,605 per dollar connected Monday, May 5, 2025, from N1,606
• The improvement comes amid renewed volatility successful the Nigerian FX markets, starring to the naira’s depreciation supra N1,600 per dollar

Legit.ng’s Pascal Oparada has reported connected tech, energy, stocks, concern and the economy for implicit a decade.

The Nigerian currency, the naira, rebounded somewhat against the dollar aft experiencing the worst commencement successful May 2025.

The section currency faced renewed volatility arsenic crude oil prices plunged amid President Donald Trump’s sweeping planetary tariffs.

Naira regains momentum aft its worst show successful aboriginal May. Credit: NurPhoto/Contributor
Source: Getty Images

Crude lipid terms affects the naira’s performance

Experts person predicted the worst period for the naira arsenic OPEC+ members determination to summation output.

They accidental lipid prices severely impact the Nigerian currency arsenic the Central Bank of Nigeria (CBN) has to support it from the overseas speech reserves.

However, astatine the extremity of trading connected Monday, May 5, 2025, the naira traded astatine N1,605 to the dollar, somewhat up from the N1,606 it closed connected Friday, May 2, 2025.

Data from the Nigerian Foreign Exchange Market (NFEM) shows that dealers quoted the dollar astatine a precocious of N1,611 and a debased of N1,601.98 per dollar.

CBN records N13.9 trillion loss

Meanwhile, CBN recorded a N13.9 trillion loss, astir $9 billion, arsenic it tries to settee overdue contracts and prune FX liabilities connected its equilibrium expanse and prevention the naira successful 2024.

The nonaccomplishment much than doubled from N6.3 trillion successful 2023 arsenic the apex slope redeemed bequest transactions to trim outstanding forex liabilities, lowering FX vulnerability and boosting reserves.

CBN records a nonaccomplishment trying to support the naira

In 2023, the slope published its finances to boost capitalist assurance and heighten transparency successful its affairs and overseas speech management.

According to reports, the improvement came arsenic the slope aims to region superior controls, alteration the naira to commercialized freely and lure inflows to extremity dollar scarcity.

The bank’s fiscal reports reportedly raised concerns astir the existent size of Nigeria’s outer reserves and the apex bank’s capableness to enactment the naira, arsenic it disclosed ample deals with JP Morgan and Goldman Sachs involving overseas currency contracts for currency to enactment the government’s revenue.

CBN settles debts to overseas banks

Bloomberg reported that the CBN said successful April that it has settled deals, including swaps and guardant contracts, to bring Nigeria’s nett overseas currency to $23 cardinal arsenic of December past year.

As of April 30, 2025, Nigeria’s gross outer reserves accrued to $37.9 billion, the highest successful 3 weeks.

The Nigerian currency, the naira, has mislaid astir 71% of its worth against the dollar since Bola Tinubu became president and embarked connected overseas currency reforms.

Reports accidental liquidity absorption costs from the merchantability of high-yielding short-tenured fixed income securities meant to mop up excess naira, power inflation, and the speech rate, accrued to N4.5 trillion successful 2024 from N1.5 trillion successful 2023.

CBN moves to support the naira against a clang arsenic crude lipid prices fall. Credit: Picture Alliance/Contributor
Source: Getty Images

CBN said it is committed to outer assemblage stableness to guarantee Nigeria is amended positioned to conscionable its planetary obligations, stabilise the naira, and boost macroeconomic confidence.

CBN adjusts Customs speech rates to wide goods

Legit.ng earlier reported that the CBN has adjusted the Customs speech complaint for cargo clearance astatine Nigeria’s ports pursuing the naira’s depreciation against the dollar.

The apex slope is liable for fixing the speech rates astatine which importers wide goods from Nigeria’s aerial and seaports.

According to information from the Customs commercialized portal, the speech complaint to wide goods was acceptable astatine N1,601.681 to the dollar by the CBN.

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Source: Legit.ng