Financial analysts at Optimum Global have projected that the naira will trade between N1,500 and N1,600 to the dollar in the second half of 2025, assuming Nigeria sustains current macroeconomic stability and continues targeted interventions.
The forecast, published in the firm’s newly released half-year outlook titled “Anchored Policy, Unanchored Risks”, builds on trends from the first half of the year and anticipates a moderate outlook for the local currency amid a still-volatile global energy landscape.
The report points to strategic currency interventions by the Central Bank of Nigeria (CBN) as a critical factor that helped keep the naira afloat in the face of several external headwinds, particularly sharp swings in oil prices and heightened foreign exchange demand.
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First-Half Recap: From Stability to Volatility and Back
The naira opened the year relatively strong, trading at about N1,537/$ in early January. By the end of the month, it appreciated to N1,480/$, largely due to a temporary surge in Brent crude oil prices, which crossed $76 per barrel, while Nigerian oil blends commanded even higher premiums on global markets.
However, that strength was short-lived. Between February and April, the naira weakened steadily, hitting a low of N1,596/$ as oil prices plunged below $60 per barrel. This price slump followed OPEC’s announcement that it would boost oil production to 2.2 million barrels per day by November, starting with a nearly 1 million barrel per day increase between April and June. The prospect of higher global supply pushed prices down, weakening Nigeria’s forex earnings and investor confidence.
The trend reversed from May through June, as geopolitical tensions in the Middle East reignited fears of supply disruptions. Conflicts between Iran and Israel, and U.S.-Iran standoffs over the Strait of Hormuz—a critical global oil chokepoint—drove prices back up. Nigerian crude traded above $70 per barrel again, restoring some strength to the naira. By the end of June, the currency had climbed to around N1,530/$, recovering nearly 3% from its April trough.
CBN’s Dollar Sales and Reserves Cushion the Naira
Optimum Global’s analysts credit the CBN’s consistent dollar interventions for softening the impact of external shocks. In particular, a significant injection of $197.71 million on April 4 helped stabilize the market amid heightened pressure from falling oil revenues and broader global economic volatility. At the time, the U.S. had just introduced new import tariffs on multiple trading partners, which triggered risk aversion and dollar hoarding across many emerging markets.
Nigeria, highly dependent on crude exports for foreign earnings, saw demand for the dollar rise as reserves came under strain. However, with external reserves climbing to $38.5 billion by June, the CBN had the firepower to continue supplying liquidity and ease pressure on the local currency.
“The naira would have fared much worse if not for the CBN’s timely interventions, particularly during March and April when FX pressure was mounting,” the Optimum Global report stated.
The firm highlighted that while oil prices play a major role in determining the naira’s trajectory, the ability of the CBN to maintain reserve buffers and respond decisively is what has kept investor confidence relatively stable.
What to Expect in H2 2025
Looking ahead, Optimum Global expects the naira to remain range-bound between N1,500 and N1,600 per dollar, provided macroeconomic stability holds and reserves are adequately managed. While geopolitical risks and global oil dynamics remain uncertain, Nigeria’s ability to respond swiftly through policy measures could help limit the downside.
However, the report also warns that risks remain “unanchored,” especially if oil prices fall below sustainable levels or if the CBN is forced to scale back interventions due to reserve depletion. A scenario of prolonged geopolitical instability or new shocks in global financial markets could also derail the fragile stability.
Still, analysts remain cautiously optimistic, noting that the CBN has shown greater agility in responding to currency pressure in recent months.
The report concluded that if current policy coordination is sustained and reserve levels remain above $35 billion, the naira will continue to trade within a controlled band, even with moderate oil price fluctuations.
As the second half of the year begins, the spotlight remains on both the oil market and the CBN’s willingness—and ability—to maintain a firm grip on the FX market.