Naira hits strongest black market level in over a year, trading at ₦1,440/$

The naira strengthened sharply on Thursday in the parallel market, trading at ₦1,440 per U.S. dollar, its strongest level since May 2024.

The currency has now gained more than ₦70 in just over a week, after exchanging at ₦1,515/$ last Monday in the black market, and is up more than ₦350 from lows of around ₦1,800 in 2023.

The rally highlights renewed momentum in Nigeria’s unofficial foreign exchange market, where most individuals and businesses access dollars amid chronic shortages at official windows.

For comparison, the official exchange rate closed at ₦1,475.35/$ on Tuesday, according to FMDQ data, underscoring how the gap between the two markets has narrowed in recent months following Central Bank of Nigeria (CBN) reforms.

Traders and analysts point to a combination of improved dollar supply and stronger investor confidence after the CBN cut interest rates last week — its first rate reduction in three years. The move followed months of currency reforms, including the unification of multiple exchange rates and tighter oversight of forex flows.

Tinubu Points to Reforms

President Bola Tinubu, in his Independence Day address on Wednesday, highlighted the naira’s rebound as evidence of reforms beginning to take hold. His administration scrapped fuel subsidies and dismantled the dual exchange rate system last year, policies that initially spurred inflation and public anger but freed up fiscal resources and reduced arbitrage opportunities.

“Our economy is recovering fast, and the worst is over,” Tinubu said. “Yesterday’s pains are giving way to relief.”

Tinubu cited gains in external reserves, now at $42.03 billion — the highest since 2019 — as well as a rebound in oil production to 1.68 million barrels per day and trade surpluses across five consecutive quarters.

Still Fragile for Households

Despite the currency’s rebound, Nigerians continue to grapple with steep food and living costs. Inflation eased to 20.12% in August, its lowest in three years, but food inflation remains high. More than 129 million Nigerians live below the poverty line, according to the World Bank.

Analysts warn that the naira’s gains could prove fragile if oil receipts falter or if investor inflows slow.