Naira Drops to N1,583/$1 at Official Market as FX Reserves Fall and BDC Reforms Intensify

The Nigerian naira weakened to N1,583 per US dollar on Monday at the official market, down from N1,579 per dollar on Friday, according to the Central Bank of Nigeria (CBN) website.

This depreciation follows an impressive appreciation streak in the official market last week, signaling renewed pressure on the naira exchange rate.

During Monday’s intra-day trading, the currency fluctuated between a low of N1,578 per dollar and a high of N1,583 per dollar, averaging N1,579.65 per dollar, per CBN data.

Against the British pound, the naira depreciated to N2,141.32 per pound on Monday, a decline from N2,136.75 per pound on Friday.

In contrast, it strengthened against the euro, appreciating to N1,796.79 per euro from N1,791.95 per euro on Friday, reflecting mixed performance across major currencies.

In the parallel market, the naira gained slight ground against the dollar, rising to N1,618 per dollar on Monday from N1,620 per dollar on Friday. This follows a stable trend last week, with the naira holding at N1,620 per dollar on Thursday and Friday, up from N1,625 per dollar on Wednesday and N1,627 per dollar on Monday, based on Lagos market data.

However, it weakened against the British pound in the parallel market, dropping to N2,160 per pound on Monday from N2,150 per pound on Friday, compared to N2,135 per pound on Thursday, N2,155 per pound on Wednesday, N2,145 per pound on Tuesday, and an opening rate of N2,142 per pound the previous week.

Nigeria’s foreign exchange reserves fell to $38,552,929,086.21 as of Friday, May 23, 2025, down from $38,561,088,550.55, according to CBN figures. This decline follows a $364 million rebound between April 30 and May 14, 2025, which had marked the first significant recovery in foreign exchange reserves this year.

Amid this dip, the CBN is intensifying reforms in the Bureau De Change (BDC) sub-sector to stabilize the forex market.

The Association of Bureau De Change Operators of Nigeria (ABCON) reports that fewer than 5% of licensed BDC members have met the new capital requirements set by the apex bank. With the June 3, 2025 recapitalization deadline looming, widespread anxiety grips BDC operators, many of whom risk losing their licenses without an extension.

In May 2024, the CBN raised BDC minimum capital requirements from N35 million to N2 billion for a Tier 1 license and N500 million for a Tier 2 license, aiming to enhance transparency and curb forex malpractices as part of broader financial sector reforms.

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