Naira crashes to N1,804 per dollar in 2025 – Afrinvest Report

The Nigerian Naira is projected to depreciate to a fair value of N1,804 per dollar at the official exchange market in 2025, according to a report by Afrinvest titled “Beyond the Rhetorics: Transforming Reforms to Tangibles.”

The report attributes this forecast to challenges anticipated in the Central Bank of Nigeria’s (CBN) ability to meet foreign exchange (FX) demands consistently, alongside expected exchange rate volatility.

Key Highlights from the Report

1. Continued Volatility

   • The report predicts that FX market fluctuations will persist in 2025 but at a more controlled pace compared to 2024.

2. CBN’s Limitations

   • Afrinvest suggests the CBN’s foreign exchange reserves may struggle to sustain market demands, particularly as recent accretions stemmed from “inorganic sources” with strict conditions on usability.

3. Budget Benchmark

   • The projection surpasses the N1,500 per dollar exchange rate benchmark proposed in Nigeria’s 2025 budget currently under review by the National Assembly.

Current Exchange Rate Overview

As of Friday, the Naira showed relative strength at the official market, closing at N1,534 per dollar, while trading at N1,650 per dollar in the black market.

2024 Stabilization Efforts

Despite consistent currency fluctuations throughout 2024, the introduction of the Electronic Foreign Exchange Matching System (EFEMS) in October helped stabilize the FX market to some extent.