For much of the past three years, the naira has dominated conversations about Nigeria’s economy. Every sharp depreciation triggered panic, every slight appreciation sparked optimism, and every intervention by the Central Bank was scrutinised as a sign of where the economy was headed. Against that backdrop, the currency’s recent stability deserves recognition.
Trading within a relatively narrow range at both the official Nigerian Foreign Exchange Market (NFEM) and the parallel market suggests that the foreign exchange market is becoming more predictable than it was during the turbulence of 2024. The gap between the official and black-market rates has also narrowed significantly, reducing opportunities for arbitrage and speculation.
Exchange rate stability makes it easier for businesses to plan, importers to price their goods and investors to assess risk. It also signals that the Central Bank’s efforts to improve liquidity and restore confidence in the foreign exchange market may be producing results.
However, stability should not be mistaken for economic recovery.
For the average Nigerian, the exchange rate is only meaningful if it translates into a lower cost of living. A stable naira offers little comfort when food prices remain high, electricity costs continue to rise and transportation consumes an increasing share of household income.
This is the challenge facing policymakers today. The government can rightly point to a calmer foreign exchange market as evidence of progress, yet many Nigerians still struggle to feel that progress in their daily lives.
Currency stability is a necessary condition for economic growth, but it is not sufficient. A stronger or more stable naira does not automatically create jobs, revive local industries or improve purchasing power. Those outcomes depend on increased production, sustained investment and policies that stimulate agriculture, manufacturing and small businesses.
The current exchange rate also remains far weaker than it was only a few years ago. Stability at around ₦1,368 to the dollar is preferable to wild fluctuations, but it does not erase the inflationary effects of the naira’s earlier depreciation or restore the purchasing power households have already lost.
The real test of economic management, therefore, is not whether the naira remains stable for a few weeks or months but whether that stability becomes the foundation for broader economic improvements that ordinary Nigerians can actually feel.
For now, the signs are cautiously positive. The foreign exchange market appears calmer, investor confidence has improved and speculative pressure has eased. But until those gains are reflected in lower prices, stronger businesses and better living standards, many Nigerians will continue to judge the economy not by the value of the naira, but by the value of what their own naira can buy.
