The Nigerian Naira recorded its highest single-day gain against the U.S. dollar this week at the official foreign exchange market, bolstered by a steady increase in the country’s external reserves.
Data from the Central Bank of Nigeria (CBN) revealed that the Naira appreciated to N1,535.47 per dollar on Thursday, up from N1,537.07 on Wednesday, representing a gain of N1.6 per dollar—the most significant since the start of the week.
This positive development is seen as a reflection of Nigeria’s growing forex stability and the resilience of its macroeconomic fundamentals.
At the parallel market, however, the Naira remained unchanged at N1,548 per dollar, maintaining the same rate as the previous day.
The week began with a depreciating trend for the Naira, but Wednesday marked the first notable appreciation, with the currency firming by N0.54 at the official market.
Analysts have attributed the upward momentum to the CBN’s strategic interventions and the sustained rise in Nigeria’s external reserves, which reached $41.24 billion as of Wednesday, up from $41.22 billion on Tuesday.
Nigeria’s external reserves have been a critical factor in stabilizing the Naira amid global currency fluctuations and domestic inflationary pressures.
Financial experts note that rising reserves not only enhance investor confidence but also provide the CBN with the capacity to defend the Naira and smooth out short-term volatilities in the forex market.
Economist Dr. Kelechi Okoro observed, “The Naira’s recent appreciation is a direct consequence of sustained reserve growth and improved capital inflows.
It signals confidence in Nigeria’s fiscal and monetary policies, and demonstrates that the authorities are committed to maintaining exchange rate stability.”
The strengthening Naira is expected to have a positive effect on import-dependent businesses, reducing the cost of foreign goods and raw materials.
Households may also benefit from increased purchasing power, particularly for imported products and international services.
However, experts caution that while the appreciation is encouraging, it remains moderate and must be sustained through continued policy consistency, investment inflows, and macroeconomic reforms.
The Naira’s gain coincides with increased activity in Nigeria’s financial markets, where investors are showing renewed confidence.
The uptick in external reserves has been linked to improved crude oil revenues, remittances from the diaspora, and enhanced regulatory oversight of forex transactions.
Financial analyst Ifeanyi Ude stressed, “Stable foreign reserves are fundamental for exchange rate management.
They enable the central bank to intervene when necessary, ensuring that the Naira does not experience abrupt depreciation.”
Looking ahead, economists anticipate a cautious but optimistic outlook for the Naira, provided that the government continues to implement prudent fiscal measures and that global oil prices remain supportive.
Policy experts also recommend that the CBN explore additional mechanisms to encourage foreign investment and diversify the sources of external reserves.
“Maintaining a balance between currency appreciation and export competitiveness is key,” Dr. Okoro added.
“Nigeria must ensure that the Naira strengthens without eroding the competitiveness of local products in the global market.”
The Naira’s highest gain against the dollar this week underscores the growing confidence in Nigeria’s forex management and macroeconomic policies.
With external reserves at $41.24 billion and continued efforts by the CBN to stabilize the currency, the market appears poised for gradual improvement. Investors, businesses, and households alike are hopeful that this positive trend will be sustained in the coming months, contributing to broader economic stability and growth.