The United States dollar surged to a two-year high against major global currencies on Monday, continuing its strong performance after an impressive jobs report on Friday, but the naira has been relatively unscathed.
The Nigerian naira has been fairly stable against the US dollar this year in contrast to peer currencies.
The naira ended the first trading week of 2025 on a flat note, signaling an easing of the pressure that previously weighed on the foreign exchange market.
According to data from the Central Bank of Nigeria (CBN), the naira began the year at an official exchange rate of N1,538.50 per dollar on January 2, 2025. By the end of the first trading week, it had slightly depreciated to N1,544.50 per dollar, reflecting a marginal decline of 0.4 percent.
The naira traded steadily within the range of N1,655 and N1,665 in the parallel market, commonly referred to as the black market, on Monday. This stability contrasts with the performance of many other emerging-market currencies, which have struggled against the dollar’s renewed strength.
Meanwhile, the US dollar’s rally continued unabated, driven by expectations of robust economic growth in the United States relative to its global peers.
Reuters reported that the dollar reached its highest level in two years on Thursday, the first trading day of 2025. This performance builds on last year’s gains, underpinned by the Federal Reserve’s monetary policy stance and broader economic trends.
The Federal Reserve has signaled its intent to adopt a cautious approach to cutting interest rates, given that inflation remains stubbornly above its 2 percent annual target. The resilience of the US economy further supports the outlook, with market participants expecting interest rates to remain relatively elevated.
