Nigeria’s currency, the naira, recorded a significant appreciation in January 2025, strengthening by N63.72 against the dollar to close at N1,474.78 per dollar on January 31 at the Nigerian Foreign Exchange Market.

Data from the FMDQ Securities Exchange Limited and the Central Bank of Nigeria (CBN) show that this 4.14% increase marks the naira’s highest level in seven months, a rate last seen on June 11, 2024, when it traded at N1,473.88/$.

The currency’s upward trajectory has been attributed to a series of policy measures implemented by the CBN, which have reshaped market dynamics and bolstered confidence in the naira.

At the Nigerian Foreign Exchange Market (NFEM), authorized dealers quoted the dollar as high as N1,495.01 and as low as N1,447.50.

The naira had opened the year at N1,538.50/$ on January 2, 2025. Although it briefly dipped to N1,535.00/$ the next day, it continued fluctuating before reaching its highest level for the month at N1,560/$ on January 16.

From the third week of January, a more sustained appreciation began, with the currency closing at N1,531/$ on January 24, strengthening further to N1,520/$ on January 28.

By the end of the month, the naira continued its climb, settling at N1,506/$ on January 29, then N1,493/$ on January 30, before reaching N1,474.78/$ on January 31.

The upward trend extended to the parallel market, where the naira appreciated to N1,610/$ on Friday, up from N1,630/$ recorded the previous day, reflecting a N20 gain within 24 hours.

The recent surge in the naira’s value is linked to key monetary and foreign exchange policies introduced by the CBN to stabilize the currency and enhance transparency in the forex market.

One of the most impactful reforms was the introduction of the Electronic Foreign Exchange Matching System in December 2024.

This platform, powered by Bloomberg’s BMatch system, enables authorized dealers to place anonymous orders into a central limit order book, ensuring fair price discovery and reducing market distortions.

The improved transparency has strengthened regulatory oversight, allowing the CBN to manage exchange rate fluctuations more effectively.

Another major policy shift was the rollout of the Nigeria Foreign Exchange Code (FX Code) on January 28, 2025.

“The FX Code marks a new era of compliance and accountability. It is not just a set of recommendations; this is an enforceable framework. Under CBN Act 2007 and BOFIA Act 2020, violations will be met with penalties and administrative actions,” CBN Governor Olayemi Cardoso stated at the launch.

The FX Code sets ethical standards for governance, risk management, trade execution, and information sharing in Nigeria’s forex market.

By aligning with global best practices, the initiative has bolstered investor confidence, contributing to the naira’s recent gains.

While the naira has strengthened, Nigeria’s foreign exchange reserves have taken a hit, dropping by $1.11 billion in January 2025.

According to CBN data, reserves stood at $40.88 billion on January 2 but had fallen to $39.77 billion by January 30, marking a 2.72% decline in one month.

This depletion is attributed to CBN interventions in the forex market, external debt servicing, and capital outflows.

Throughout January, reserves fluctuated above the $40 billion mark in the first half of the month but gradually declined.

By January 22, reserves stood at $40.05 billion before dropping below $40 billion for the first time in months on January 23.

By the end of January, reserves had settled at $39.77 billion, the lowest level in three months.

The steady decline suggests that the CBN may have utilized part of its reserves to support the naira’s appreciation and manage liquidity in the forex market.

A similar drop was recorded in April 2024, when reserves fell by $2.16 billion in 29 days.

At the time, Governor Cardoso attributed the decline to debt servicing obligations rather than interventions to stabilize the naira.

With the naira gaining ground and forex reserves under pressure, market analysts are watching to see if the current momentum can be sustained.

CBN’s continued efforts to align Nigeria’s forex market with global standards could help maintain stability, but the balance between strengthening the naira and preserving reserves remains a critical challenge.

ROAMAN NEWS

In response to a steady rise in global crude oil prices, the Dangote Petroleum Refinery has announced an increase in the price of Premium Motor Spirit (PMS), commonly known as petrol.

In an email statement issued on Friday, the refinery confirmed that its refined products will now be priced at N955 per litre at the loading gantry.

The price adjustment will affect marketers purchasing between 2 million and 4.99 million litres, who will now pay N955 per litre. Marketers purchasing 5 million litres or more will be charged N950 per litre.

This new pricing structure represents a N55.50 increase, or a 6.17% hike, compared to the discounted rate of N899.50 per litre offered in December 2024. The updated pricing will come into effect at 5:30 PM on Friday.

The statement titled “Communication on PMS Price Review” reads, “Dear Esteemed Customer, Trust this email finds you well. Kindly be advised that effective from 5:30 PM today, an upward adjustment has been implemented on the gantry price of Premium Motor Spirit.”

It further elaborates, “All stock balances yet to be lifted as of the above-stated time will be repriced at the new reviewed prices. We shall communicate with customers on their revised volumes based on the reviewed prices, in due course.”

This price change is expected to ripple through the downstream petroleum sector, significantly impacting private depots and retail markets.

Oil and gas expert Olatide Jeremiah, CEO of petroleumprice.ng, predicted that private depots would raise the price of refined products due to the refinery’s significant influence on the market.

Jeremiah commented, “Dangote Refinery’s influence on fuel prices has become unmatched; private depots, major marketers, and independent marketers will have to align with this new price. Therefore, Nigerians should expect an increase in petrol pump prices.”

As of Thursday, global crude oil prices were trading at $81.84 per barrel, marking a significant peak for 2025, contributing directly to the increase in fuel prices.

Minister of State for Petroleum Resources, Heineken Lokpobiri, also highlighted that fluctuations in international crude oil prices are a driving force behind changes in domestic pump prices.

He added that with the deregulation of the downstream sector, the government no longer controls fuel pricing, leaving market forces to dictate prices

ROAMAN NEWS