Nigerian Naira Exchange Rates Today: CBN Official FX Market Analysis & Economic Impact (December 5, 2025)

Welcome back to our daily forex market analysis for Nigeria. Today, we break down the latest official Central Bank of Nigeria (CBN) foreign exchange rates released for The week ended, December 5, 2025. Understanding these rates is crucial for businesses, investors, travelers, and policymakers as they reflect the health of the Nigerian economy and influence inflation, investment, and trade for the coming week ahead.

Below is the detailed snapshot of the Nigerian Foreign Exchange Market (NFEM) rates as published by the CBN:

Currency	Buying Rate (₦)	Central Rate (₦)	Selling Rate (₦)
US Dollar	1,449.43	1,449.93	1,450.43
Euro	1,688.00	1,688.59	1,689.17
Pounds Sterling	1,934.12	1,934.78	1,935.45
Yuan/Renminbi	204.98	205.05	205.12
Swiss Franc	1,802.10	1,802.72	1,803.34
SDR	1,977.17	1,977.85	1,978.53
WAUA	1,975.43	1,976.11	1,976.79

Source: CBN Official NFEM Data, December 5, 2025

Recent Trend of the Naira: Appreciation or Depreciation?

In recent months, the Nigerian naira has experienced significant volatility. Compared to previous weeks, the current rates suggest a relative stability in the official market, with minor fluctuations. However, the naira continues to face downward pressure due to factors such as dollar scarcity, high import demand, and speculative activities. Year-to-date, the naira has depreciated against major currencies like the US dollar and British pound in the official market, though CBN interventions have sometimes cushioned the fall.

Black Market vs. Official Rates: The Persistent Gap

The black market (parallel market) exchange rate often trades at a premium to the official CBN rate. As of early December 2025, the parallel market rate for the US dollar is reported around ₦1,480–₦1,510, indicating a gap of approximately ₦30–₦60 above the official selling rate. This disparity reflects:

• FX demand pressure unmet by official channels
• Limited liquidity in the official market
• Speculative trading in the parallel market

The CBN continues to discourage the use of the black market, but accessibility and speed keep it active for many individuals and SMEs.

How FX Rates Affect Inflation in Nigeria

Nigeria’s inflation rate is highly sensitive to exchange rate movements. A weaker naira increases the cost of:

• Imported goods (fuel, machinery, electronics, food items)
• Production inputs for local manufacturers
• Service charges denominated in dollars

This leads to cost-push inflation, which has been a major driver of Nigeria’s rising consumer prices. The December 2025 rates, if sustained, may keep inflation elevated unless domestic production improves.

Impact of CBN Monetary Policy on Exchange Rates

The Central Bank of Nigeria’s monetary policy decisions directly influence forex liquidity and rates. Recent hikes in the Monetary Policy Rate (MPR) aim to:

• Attract foreign portfolio investments
• Stabilize the naira
• Control inflation

Higher interest rates can strengthen the naira by boosting foreign inflows, but they also raise borrowing costs, potentially slowing economic growth. The current rates reflect ongoing CBN efforts to manage forex supply amid external pressures.

Effect of Exchange Rates on Nigerian Stock Market Performance

The Nigerian stock market often reacts to forex volatility. A depreciating naira can:

• Boost earnings for export-oriented and dollar-earning firms
• Increase costs for import-dependent companies
• Affect investor sentiment, especially foreign investors concerned about currency losses

In recent months, the equity market has shown mixed reactions to forex movements, with sectors like banking and commodities experiencing volatility tied to dollar liquidity.

Key Factors Affecting Foreign Exchange Rates in Nigeria

Several structural and market factors drive Nigeria’s forex rates:

1. Crude Oil Prices – Nigeria’s primary source of dollar earnings.
2. Foreign Reserves – Level of CBN’s ability to intervene.
3. Import Demand – High reliance on imported goods drains forex.
4. Monetary Policy – Interest rates and money supply controls.
5. Speculation & Market Sentiment – Influences parallel market behavior.
6. External Debt Servicing – Dollar obligations reduce reserves.
7. Capital Flows – FDI and portfolio investments.

Disclaimer:

This blog post is for informational purposes only and does not constitute financial advice. Rates are subject to change. Always consult a financial expert before making forex-related decisions.

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