Nigeria’s local currency, the naira, has continued its upward trajectory, closing last week at ₦1,514.86/$ on the official Nigerian Foreign Exchange Market (NFEM), marking its strongest performance in nearly five months.
According to data from the Central Bank of Nigeria (CBN), this level was last seen on March 6, when the currency traded at ₦1,512.30/$.
At the parallel market, the naira also gained ground, rising to ₦1,538/$, reflecting a 0.02 per cent appreciation.
The rebound has been attributed to improved liquidity, sustained dollar inflows, and timely interventions by the apex bank.
Analysts noted that the CBN injected about $15 billion into the market in recent weeks to stabilise supply and reduce volatility.
The positive momentum comes after a turbulent August, during which the naira hovered around ₦1,526/$ at the beginning of September.
By the end of last week, it had strengthened to ₦1,514/$, giving investors and businesses renewed optimism about exchange rate stability.
AIICO Capital, in its weekly market review, observed that the FX market opened on a calm note, supported by balanced flows and offshore supply.
This kept rates stable between ₦1,527 and ₦1,533/$ before CBN’s intervention and opportunistic portfolio inflows spurred a rally to the ₦1,519–₦1,523 range.
“By week’s end, the naira sustained gains, trading between ₦1,508 and ₦1,529/$,” the analysts said, noting that sentiment in the market improved significantly.
Analysts from Cowry Asset Management also highlighted that the naira’s rally was bolstered by improved foreign exchange reserves, which rose 0.10 per cent week-on-week to $41.31 billion.
This modest build-up, they explained, enhances the CBN’s ability to defend the currency when necessary.
“Going into the new week, we expect the naira to remain relatively stable across both the official and parallel markets, supported by sustained dollar inflows and the recent uptick in reserves.
However, speculative demand and global oil market volatility could weigh on further gains,” the report stated.
Global oil prices, a critical factor in Nigeria’s forex earnings, remain under close watch.
The upcoming OPEC+ meeting is expected to influence production levels and market dynamics, which could in turn affect Nigeria’s external receipts and the naira’s performance.
Market watchers say that the CBN’s sustained interventions and policy adjustments have been instrumental in stabilising the exchange rate.
Since adopting more market-friendly reforms earlier in the year, the bank has worked to attract foreign portfolio investments and rebuild confidence in Nigeria’s FX market.
According to financial experts, the apex bank’s decision to ease restrictions on foreign exchange repatriation and encourage diaspora remittances has improved supply.
This has created room for the naira to recover from its earlier slump, which saw the exchange rate cross ₦1,600/$ in mid-2025.
The naira’s appreciation offers potential relief for businesses that rely on imports, as it could reduce the cost of foreign goods and raw materials.
This development may also help ease inflationary pressures, especially on essential commodities such as food, fuel, and pharmaceuticals.
For households, a stronger naira translates to lower costs of imported items and services, though analysts caution that the benefits may take time to filter through to the average consumer.
Export-oriented businesses, however, could face tighter margins, as stronger currency values reduce export competitiveness.
But stakeholders argue that long-term stability in the FX market is more beneficial for Nigeria’s economic growth.
Looking ahead, analysts expect the naira to maintain its current momentum if global oil prices remain stable and foreign investors continue to show interest in Nigerian assets.
The CBN’s efforts to build up reserves and deepen market confidence are also seen as critical factors that will shape the currency’s trajectory in the months ahead.
For now, the naira’s rise to ₦1,514/$, its highest point in five months, signals a cautiously optimistic outlook for Africa’s largest economy as it works to stabilise inflation, attract investment, and strengthen trade under ongoing reforms.
