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Data from the Central Bank of Nigeria (CBN) revealed the Naira exhibited a modest recovery in May 2025, with the average exchange rate settling at ₦1,595.098/$, compared to ₦1,604.70/$ in April 2025. This reflects a month-on-month appreciation of 0.48%, signalling slight improvements in foreign exchange liquidity and easing pressure on the naira. The strengthening can be linked to cautious interventions by the Central Bank. However, on a year-on-year basis, the naira depreciated significantly. The closing rate in May 2024 stood at ₦1,482.98/$, indicating that the naira weakened by 7.39% over the 12-month period. This reflects structural weaknesses in the FX market, including high import demand, limited non-oil exports, and dwindling capital inflows. During the review period, the naira traded within a narrow band, with the lowest rate at ₦1,579/$ (May 23, 2025) and the highest in April at ₦1,644/$ (April 9, 2025), indicating relative stability in May compared to heightened volatility in April. Notably, the naira appreciated for three consecutive days from May 19 21, 2025, suggesting improved market confidence. Despite this temporary easing, exchange rate volatility continues to severely impact consumers and companies through the persistent rise in the prices of goods, services, and input costs. Thus, to ensure long-term currency stability, policymakers must focus on rebuilding external reserves and enhancing non-oil exports by strengthening the manufacturing sector.
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