Naira official exchange rate falls slightly as forex demand rises. Analysts project steady range despite external shocks and cautious CBN interventions

[dropcap]N[/dropcap]aira official exchange rate dropped marginally at the close of trading on Tuesday, finishing at ₦1,529.22 per US dollar, according to the Central Bank of Nigeria.

Also read: Naira stability boosted as CBN injects $580m despite dwindling reserves

This figure marked a slight depreciation from the ₦1,528.33 rate recorded the previous day.

The development follows the recent resumption of international transactions using naira-denominated cards. Several commercial banks, including United Bank of Africa, GTBank, Wema Bank, and FirstBank, have resumed the service.

These institutions introduced limits ranging from \$1,000 quarterly to \$500 monthly.

This renewed access to global spending tools has stirred expectations for increased demand for foreign currency. The effect has been subtle at the official window but is closely monitored for signs of broader market movement.

Despite the change in the official rate, the parallel market maintained its previous level. A report by CardinalStone noted that the naira traded flat at ₦1,540 per dollar.

In its mid-year economic outlook, CardinalStone predicted that the naira would remain within a stable corridor during the second half of 2025.

The firm’s analysts foresee a trading range between ₦1,550 and ₦1,635 per dollar, suggesting a market still facing macroeconomic constraints but no immediate volatility.

Looking back on the first half of the year, the naira came under pressure from international developments. CardinalStone analysts pointed to US trade policy shifts and rising geopolitical tensions as major contributors to global risk aversion.

These conditions led to capital outflows from Nigeria, amounting to \$22.83 billion as investors sought safer assets such as US Treasuries and gold.

To mitigate the fallout, the Central Bank of Nigeria became more active in the foreign exchange market. In total, it sold \$4.72 billion between January and June.

These interventions were part of a cautious approach aimed at smoothing volatility rather than pegging the currency to any specific level.

“We do not believe these interventions signalled a return to a fixed exchange rate regime or reflect an attempt to target a specific level for the naira,” CardinalStone noted in its report.

“Rather, the current FX framework allows for discretionary interventions in the presence of perceived market distortions.”

The report added that the distortions seen during the first half of the year were predominantly global in nature.

As such, they did not reflect any fundamental weaknesses in Nigeria’s domestic financial systems. Transparency efforts by the central bank have also contributed to better market sentiment.

On average, the CBN’s monthly forex sales stood at \$786.58 million. This figure is significantly lower than the \$2.30 billion monthly average during the pre-COVID period and even below the \$1.38 billion seen just after the pandemic.

The scaled-back interventions indicate that the regulator is moving away from defending unsustainable levels.

Market observers, both local and international, increasingly believe that the naira is approaching its true market value. One economist familiar with the matter remarked,

“There’s more clarity and less noise now in the foreign exchange space. That alone is a big win.”

Although the road ahead remains uncertain, especially given potential external shocks, the outlook suggests stability rather than crisis.

With the resumption of card-based international transactions and careful CBN activity, the naira may continue to find its footing.

Also read: Naira appreciates by over 8% following CBN’s new FX platform

The coming months will be crucial in assessing the resilience of Nigeria’s monetary policy tools. Stakeholders will watch both official and parallel market trends closely, but for now, the general consensus is one of cautious optimism.