Nigeria's national currency, the naira, has once again experienced a consecutive depreciation against the US dollar at the official foreign exchange market, marking its third straight decline this week. This persistent weakening highlights ongoing challenges in managing the country's currency stability amidst fluctuating economic indicators.
Official Market Sees Consistent Decline
According to data released by the Central Bank of Nigeria (CBN), the naira fell to N1,535.61 per dollar on Wednesday, July 23, 2025, from N1,535.24 recorded on Tuesday, July 22, 2025. This represents a marginal daily depreciation of 0.37 naira. Cumulatively, from Monday to Wednesday of this week, the naira has shed N3.07 against the dollar in the official market, signalling a worrying trend for businesses and individuals engaged in international trade and transactions.
Black Market Stability Amidst Official Woes
In contrast to the official market, the naira exhibited stability in the parallel or black market. Most Bureau De Change operators in Wuse Zone 4, Abuja, reported a consistent rate of N1,540 per dollar on Wednesday, maintaining the same rate as the previous day. This divergence between the official and unofficial rates often indicates underlying pressures and a preference for the black market due to perceived accessibility or better rates.
External Reserves Under Scrutiny
The depreciation comes at a time when Nigeria's external reserves are facing renewed scrutiny. The CBN Governor, Olayemi Cardoso, in his communiqué following the 301st Monetary Policy Committee (MPC) meeting held earlier this week (July 21-22, 2025), stated that the country's external reserves stood at $40.1 billion as of July 18, 2025. This figure, as noted in the MPC communique, was stated to represent about 9.5 months of import cover for goods.
However, a check on the CBN's official website on Thursday, July 24, 2025, revealed a drop in these reserves. Nigeria’s external reserves had declined to $38.37 billion as of July 22, 2025. This significant reduction in a matter of days raises questions about the sustainability of the CBN's efforts to maintain currency stability and manage liquidity in the foreign exchange market.
MPC Maintains Status Quo
Despite the naira's recent struggles, the Monetary Policy Committee (MPC) of the CBN, in its 301st meeting held on July 21 and 22, 2025, decided to maintain the current monetary policy stance. All key parameters, including the Monetary Policy Rate (MPR) at 27.50 per cent, the asymmetric corridor around the MPR at +500/-100 basis points, the Cash Reserve Ratio (CRR) for Deposit Money Banks at 50.00 per cent, and the Liquidity Ratio at 30.00 per cent, were retained.
The MPC communiqué acknowledged a decline in headline inflation in June 2025 for the third consecutive month, largely attributed to moderation in energy prices and a perceived stability in the foreign exchange market. However, the persistence of underlying price pressures was noted, and the committee reaffirmed its commitment to policies aimed at anchoring inflation expectations and easing exchange rate pressure.
The continuous slide of the naira in the official market, coupled with the recent dip in external reserves, underscores the ongoing economic challenges facing Nigeria and highlights the delicate balance the CBN must strike to manage inflation, maintain exchange rate stability, and shore up foreign exchange reserves.