— Naira Falls Slightly As Market Volatility Persists
Abuja, Nigeria – The Nigerian Naira continues to fluctuate against the US Dollar as the exchange rate on Wednesday, May 21, 2025, shows a slight weakening in both official and parallel markets, reflecting ongoing economic pressures and market uncertainty.
Official Market Rate Slips Slightly
According to the data obtained from currency monitoring platforms and the Central Bank of Nigeria (CBN), the official exchange rate stands at:
- ₦1,597.24 per $1 USD
This marks a minor depreciation from the previous day’s opening rate of ₦1,597.69. During intra-day trading, the Dollar peaked at ₦1,597.92 and hit a low of ₦1,597.24, indicating a narrow but notable trading range.
The mid-market exchange rate hovered around ₦1,597.58, reflecting subdued liquidity and demand for foreign exchange in the official window.
Black Market Rate Remains Elevated
In contrast to the official rate, the black market—also known as the parallel market—reported the Dollar trading at:
- ₦1,630 per $1 USD
This rate represents a ₦32.76 premium over the official rate, equivalent to approximately 2.05% above the regulated market price. Despite multiple regulatory crackdowns, the parallel market continues to thrive due to persistent demand for forex by importers, students, and travelers unable to access dollars through formal channels.
Exchange Rate Trends in May 2025
Recent data suggests a volatile performance by the Naira in the ongoing month:
- Highest rate recorded: ₦1,619.38 (May 16, 2025)
- Lowest rate recorded: ₦1,598.93 (May 21, 2025, early session)
This intra-month fluctuation is driven by external factors including oil revenue dynamics, dollar inflow from diaspora remittances, and the global strength of the US dollar.
Economic Outlook and Budget Projections
Nigeria’s 2025 national budget, as outlined by fiscal authorities, projects an average exchange rate benchmark of ₦1,400/$1, signaling government intent to stabilize the currency. However, analysts believe achieving this target will require robust monetary reforms, enhanced forex reserves, and a crackdown on speculative trading.
The current divergence between official and black market rates continues to undermine investor confidence and complicates importation, pricing, and inflation control.
Government Efforts to Bridge Forex Gap
The Central Bank has reiterated its commitment to unifying the exchange rate and clearing forex backlogs. In previous months, the apex bank introduced a series of monetary tools to mop up liquidity and attract foreign investment.
Despite these efforts, the market remains skeptical due to continued inflationary pressure, dwindling foreign reserves, and geopolitical risks in West Africa.
What This Means for Nigerians
For many Nigerians, especially importers, students studying abroad, and small businesses, the rising cost of dollars in unofficial markets translates to higher operational expenses and consumer prices.
While some optimism remains tied to possible oil price recovery and IMF support, the short-term outlook suggests that exchange rate volatility will persist unless comprehensive reforms are implemented.
What you should know
The Dollar-to-Naira exchange rate on Wednesday, May 21, 2025, highlights Nigeria’s fragile currency dynamics amid a challenging economic landscape. The widening gap between official and black-market rates underscores the urgent need for policy coordination, market confidence restoration, and forex inflow expansion.
As global financial markets remain sensitive, all eyes are on the Central Bank and federal government to stabilize the Naira and restore its value in the face of persistent economic headwinds.
For real-time updates on Dollar-Naira trends, stay tuned to TJ News Nigeria.
