Naira rebounds to three-week best days before Christmas

The naira strengthened to N1,449.9 per dollar on Tuesday, its best level since December 4 (N1,447.8/$1), according to data from the CBN.

The rebound follows weeks of volatility caused by a mismatch between supply and demand in the foreign exchange market.

Traders noted that foreign investor exits, slower-than-expected diaspora inflows for the festive “Detty December” period, and ongoing speculative activity had kept the naira under pressure.

Aminu Gwadebe, president of the Association of Bureau De Change Operators of Nigeria (ABCON), told Nairametrics, “There was no liquidity. The naira is suffering because online transfers are above N1,500. Foreign investors are exiting, and the expected Detty December inflow has not arrived in the volumes we normally see.”

The CBN’s recent $150 million forex injection and licensing of 82 new BDC operators appear to have provided relief.

Despite the short-term rally, Nigeria’s foreign reserves fell by $263 million to $45.21 billion as of December 17. Portfolio inflows and foreign direct investment remain muted, highlighting structural pressures on the naira.

Analysts say that while the currency’s two-week high offers temporary relief, sustained stability will depend on improved liquidity, diaspora remittances, and investor confidence as Nigeria heads into the year-end peak of forex demand.