February 2025 ended with the naira going up by 8.5% in the parallel market to 1,490 per dollar.
The official market however went down by 1.7% to settle at 1,500 per dollar.
According to the Afrinvest Monthly Market Report, the country’s foreign reserves dropped by 3.2% month on month.
As of Thursday, the reserves were $38.46bn.
Analysts linked the decline to the Central Bank of Nigeria’s efforts to stabilise the naira, particularly by paying the verified portion of a $7.0bn forex backlog.
They predict the naira will continue to perform well across forex segments in March provided there are no market shocks, as the CBN continues to supply US dollars to bankers and direct money brokers.
Recent trends in the forex market have shown the naira strengthening modestly against the dollar, hovering around the N1,500 mark in both official and parallel markets.
Cowry Asset Research analysts noted that the Nigerian oil benchmark, Bonny Light crude, swooned in the international market, dropping $2.36 or 3.2% week on week to close at $75.88 per barrel as of Thursday.
They said this was due to weaker global demand which has put pressure on crude prices and reduced dollar inflows into the Nigerian economy.
This reduction in oil earnings led to a $240m or 0.61% drop in reserves weekly, explaining the liquidity challenges facing the country.
At the official window, the naira appreciated by 93 kobo to close at N1,500.15 per dollar.
In the parallel market, the naira gained N5 to settle at N1,490 per dollar as demand pressure eased.
Looking ahead, analysts expect the CBN to do more to stabilise the forex market.
They believe the CBN will take more decisive steps to support the naira, tighten liquidity and enhance forex supply mechanisms.
This may allow the naira to gain further against the dollar next week.
Experts have earlier highlighted several challenges that could threaten the naira’s stability.Debt, falling reserves and high inflation.