Naira Continues Upward Trajectory as Banks and Traders Adjust Dollar Rates
The Nigerian naira has sustained its positive momentum, appreciating further against the United States dollar in the official market. According to data from the Central Bank of Nigeria, the naira closed at ₦1,335.95 per dollar at the Nigerian Foreign Exchange Market, marking an improvement of ₦8.05 from the previous rate of ₦1,344.00 per dollar. This steady gain reflects stronger foreign exchange supply relative to demand pressures, highlighting increased liquidity and improved market confidence.
Parallel Market Follows Suit with Strengthened Naira
In the parallel market, commonly known as the black market, the naira also strengthened by 0.87 per cent, trading around ₦1,371 per dollar. Traders attribute this improvement to sustained foreign exchange interventions and targeted dollar sales to informal sector operators. Reports indicate that approximately $150,000 in foreign exchange was made available to support small-scale players, helping to ease speculative pressure and align rates more closely with official market trends. The convergence between both markets is viewed as a positive signal for overall currency stability, reducing arbitrage opportunities and speculative trading.
External Reserves Rise to $47.8 Billion, Bolstering Naira Recovery
Nigeria's external reserves have recorded a fresh increase, adding momentum to the naira's recovery. Latest figures show reserves rising to $47.80 billion, representing a $135.75 million increase. This build-up has been supported by stronger oil-related inflows and improved foreign exchange management. Higher crude oil receipts, alongside renewed investor confidence, have boosted the country's foreign exchange buffers. Anchoria Securities Limited noted that supportive supply conditions and consistent policy measures are helping anchor confidence in the currency market, strengthening the central bank's ability to defend the naira against excessive volatility.
Market Outlook Remains Cautiously Optimistic Amid Global Factors
Market participants expect the naira to continue trading largely in line with prevailing supply and demand dynamics. With external reserves improving and foreign exchange inflows remaining relatively stable, short-term pressures appear contained. However, analysts caution that global oil prices, capital flows, and domestic liquidity conditions will remain key variables influencing the currency's trajectory. Sustained fiscal discipline and continued foreign exchange market reforms are also critical to maintaining the current stability.
For now, banks and currency traders are quoting a firmer rate for the dollar across trading windows, reflecting renewed optimism in Nigeria's foreign exchange market. If current trends persist, the naira's rally could further narrow the gap between official and parallel market rates, reinforcing confidence among businesses and investors alike. This development follows a recent period where the naira weakened against the dollar, slipping to N1,355.42 per dollar on February 13, due to sustained demand for foreign exchange and the absence of fresh intervention from the Central Bank of Nigeria. Despite this, the naira posted gains against other major currencies in the same window, indicating a mixed but overall positive trend in the market.
