Naira Closes July at ₦1,533.55/$, Dips by 0.25%

The Nigerian naira ended the month of July 2025 on a slightly weaker note, closing at ₦1,533.55 per dollar at the official market, reflecting a 0.25% decline from the previous month. The marginal depreciation underscores persistent pressures on Nigeria’s foreign exchange market despite various monetary interventions by the Central Bank of Nigeria (CBN).

According to data from the FMDQ Securities Exchange, the naira opened July at ₦1,529.78/$ and recorded slight fluctuations throughout the month, primarily driven by limited dollar liquidity, strong demand from importers, and external sector imbalances. The closing rate represents a ₦3.77 loss month-on-month and signals a continued strain on the naira’s stability amid lingering economic challenges.

Currency traders and market analysts attributed the depreciation to sustained demand for foreign currency for imports, tuition, travel, and other personal and business needs. Although the apex bank has injected several rounds of FX supply into the market, these have not significantly eased the pressure due to broader structural issues such as low export earnings and reduced capital inflows.

“The CBN has tried to maintain some stability, but the demand pressures remain overwhelming, especially with the ongoing need for FX by manufacturers, students, and travelers,” said Bamidele Adebayo, a Lagos-based currency analyst. He added that although the depreciation in July was not dramatic, it signals a need for more robust measures to defend the naira.

The volatility also reflected in the parallel market, where the naira traded as high as ₦1,620/$ at some points in the month before slightly retracing toward the end. The widening gap between the official and parallel market rates continues to raise concerns among investors and the business community, who worry that the disparities encourage arbitrage and discourage formal remittance flows.

Despite the decline, the CBN has reiterated its commitment to maintaining exchange rate stability through its reforms. These include FX harmonization, a crackdown on illegal currency trading, and ongoing efforts to boost diaspora remittances and non-oil export revenues. The regulator has also engaged in strategic bilateral arrangements with global financial institutions to improve dollar liquidity in the system.

In addition to FX policy, inflationary trends have continued to influence the naira’s performance. With year-on-year inflation still hovering above 30%, the local currency’s real purchasing power remains under pressure. Experts argue that unless inflation is tamed and Nigeria’s trade balance improves, the naira may remain vulnerable despite monetary tightening.

“The twin challenge of inflation and a weak naira is particularly tough for households and businesses,” noted Dr. Ifeanyi Nwoke, an economist at the University of Abuja. “While the July movement may seem minor, it adds to a broader trend of erosion in value, which ultimately affects economic planning, cost structures, and consumer confidence.”

Nonetheless, the federal government and the CBN have continued to express optimism. The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, recently assured that ongoing economic reforms would yield greater stability in the medium term. He emphasized fiscal discipline, diversification of revenue, and investment in productive sectors as key strategies to support the naira.

As August begins, stakeholders will be watching closely to see whether the CBN’s efforts will yield firmer results in narrowing the supply-demand gap and restoring confidence in the naira. In the meantime, importers and other dollar-dependent sectors are likely to continue facing cost pressures, while households adjust to higher prices of imported goods and services.

With upcoming global market shifts and geopolitical developments, Nigeria’s exchange rate path will likely remain delicate. Market participants are urging the government to intensify export promotion, improve the ease of doing business, and encourage foreign direct investment to build stronger FX reserves and ultimately strengthen the naira in the months ahead.