Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The Nigerian currency, the naira, crashed again in the official Nigerian Foreign Exchange Market (NFEM) for the second consecutive day on Thursday, March 27, 2025.

The local currency shed N1 from its value, trading at N1,537.66 per dollar from N1,536 it traded the previous day.

The naira experienced a slight volatility in the FX market after demand for the US dollar resurfaced amid reforms by the Central Bank of Nigeria (CBN).

Data from the CBN shows that currency dealers quoted the dollar at a high of N1,540 to a dollar and a low of N1,535.

The development follows a warning by CBN governor, Olayemi Cardoso, to currency dealers.

Cardoso said the bank is ready to prosecute speculators who cause distortions in the market.

The CBN boss assured that the apex bank remained committed to upholding order in the nation's foreign exchange market by locating and removing dishonest players whose actions jeopardise the naira's stability. 

Meanwhile, the naira appreciated in the parallel segment of the foreign exchange market on Thursday, March 27, 2025, trading at N1,560 per dollar from N1,570.

As a result, the gap between the parallel market and the official window narrowed to N20 per dollar from N31 as of Wednesday, March 26, 2025.

Analysts have asked the CBN to intervene by releasing forex into the market to forestall the total collapse of the naira. 

They say the apex bank should inject more forex into the market to improve liquidity and stabilise the naira.

However, Chatham House, a UK think-tank, warned against strengthening the naira, saying the local currency is now more competitive in the market.

Chatham House noted that after its depreciation, the naira is better positioned to help the Nigerian economy progress.

In an article titled ‘Nigeria’s Economy Needs the Naira to Stay Competitive, ’ the think tank noted that while inflation has surged under President Bola Tinubu, strengthening the naira was not the best way to improve the situation.

It argued that the weaker naira has made Nigeria more competitive compared to previous years when the naira exchanged at around N460 per dollar.

In the article, Chatham House noted that while it is tempting to strengthen the naira to make imports cheaper and lower inflation levels, the federal government should not take that route.

Legit.ng earlier reported that the Nigerian naira depreciated in the official foreign exchange market on Wednesday, March 26, 2025.

At the end of trading, the local currency depreciated by N5, closing at N1,537.62 per dollar from N1,532.90 the previous day.

The local currency’s fall came amid high demand for the US dollar, as petroleum product marketers speculated that the Dangote Refinery's decision to halt the sale of fuel in naira could put the currency under pressure.

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Source: Legit.ng