The naira is poised for a surprise rebound in 2025 as analysts project higher FX inflows into the economy and lower petrol and food imports.

According to them, enhanced oil production, more substantial net capital inflows into the economy, and lower petrol and food imports will occur in the coming year. They noted that all the data favour the local currency.

Reports quoted Uche Uwaleke, the director of the Institute of Capital Market Studies at Nasarawa State University, saying that the outlook is due to lower petrol and food imports and increased fuel exports, which would be an FX earner for the country.

He pointed to the reduced import of petroleum products as a significant catalyst for naira’s rebound.

He further stressed the possible impact of increased earnings from the export of petroleum products.

Uwaleke noted the role of foreign portfolio investments and diaspora remittances, which would support the naira.

Naira gains against the dollar

He said firm external reserves would boost the economy and preserve the naira’s value.

Meanwhile, the naira appreciated on Friday, December 19, 2024, against the US dollar to close at N1,541 per dollar, relative to N1,545 the previous day.

Also, the naira traded at N1,600 per dollar in the parallel market; from N1,680, it traded on the last day.

According to analysts, the Nigerian currency has lost 70% of its value against the US dollar.

In October 2024, the local currency was deemed the world’s worst-performing currency after the Lebanese pound and the Ethiopian Birr.

Oil production to improve the naira’s value

The experts disclosed that the improved oil production would positively affect external reserves and, in turn, the naira.

In November, Nigeria’s crude oil production improved to its highest level since April 2021, hitting 1.69 million barrels per day.

Also, the newly introduced Electronic Foreign Exchange Matching System (EFEMS) has seen the naira gain more value as FX trading became more transparent.