Naira Projected to Fall to N1,804 Per Dollar in 2025 – Report
A new report by Afrinvest has projected that the Nigerian Naira could depreciate to a fair value of N1,804 per dollar at the official market by 2025.
The report, titled “Beyond The Rhetorics: Transforming Reforms to Tangibles,” highlights the likelihood of sustained foreign exchange (FX) volatility driven by challenges faced by the Central Bank of Nigeria (CBN) in meeting forex demand.
“We anticipate that exchange rate volatility would persist in 2025, albeit at a modest pace,” the report noted. “Our prognosis is hinged on the belief that the CBN would be constrained from adequately meeting market demand on a sustained basis, as the recent FX reserves accretion was largely driven by inflows from inorganic sources, including those with stringent conditions on usability.”
This forecast contrasts sharply with the N1,500 per dollar benchmark proposed in the 2025 federal budget currently under review by the National Assembly.
Current Exchange Rates and Stabilization Efforts
Despite ongoing fluctuations, the Naira has recently shown gains in the official market, closing at N1,534 per dollar, while trading at N1,650 per dollar in the black market, according to a Friday report by DAILY POST.
In 2024, the Naira experienced significant volatility, but the introduction of the Electronic Foreign Exchange Matching System (EFEMS) in October brought relative stability to the market. The EFEMS system has been instrumental in improving transparency and reducing inefficiencies in forex trading.
Implications for 2025
The projection of a further depreciation of the Naira raises concerns about the country’s economic outlook, particularly regarding inflation and the cost of imports. If the CBN’s capacity to stabilize the market remains constrained, businesses and consumers may face heightened financial pressures in the coming year.
The report emphasizes the need for sustainable reforms and strategic foreign exchange management to mitigate the impact of anticipated challenges in the FX market.
