Naira Likely to Depreciate to N1,804 per Dollar by 2025 – Report

The Nigerian Naira is expected to depreciate to a fair value of N1,804 per dollar at the official market by 2025, according to a report by Afrinvest titled ‘Beyond The Rhetorics: Transforming Reforms to Tangibles’.

The projection is attributed to potential constraints faced by the Central Bank of Nigeria (CBN) in meeting foreign exchange demands and managing anticipated volatility in the forex market. Afrinvest noted that while exchange rate fluctuations are expected to continue, the pace of volatility may moderate.

The report highlights concerns over the CBN’s reliance on foreign exchange reserves that have been bolstered by inflows from inorganic sources, often tied to restrictive conditions on usability. This could limit the bank’s ability to consistently meet market demand.

The projected depreciation contrasts with the N1,500 per dollar benchmark proposed in the 2025 federal budget currently under review by the National Assembly.

Recent market trends show the Naira gaining ground, closing at N1,534 per dollar in the official market and N1,650 in the parallel market. Despite fluctuations throughout 2024, the introduction of the Electronic Foreign Exchange Matching System (EFEMS) in October has provided some stability.