Nigeria’s naira climbed to its strongest level in more than eight months at the official foreign-exchange market, extending a recent rebound as improved liquidity and easing dollar demand offered short-term relief to the currency.
The naira settled at ₦1,396 per dollar at the Nigerian Foreign Exchange Market (NFEM) on Thursday, according to data published by the Central Bank of Nigeria. The move marked the currency’s firmest close since late May 2024, when it last traded in the low ₦1,300 range.
The latest advance follows a volatile start to the year, during which the naira swung sharply amid tight dollar supply and uneven investor sentiment.
Recent gains suggest conditions at the official window have stabilised somewhat, supported by policy reforms and intermittent inflows, though analysts caution that underlying pressures remain.
Despite the strengthening at the regulated market, the informal segment continues to reflect deeper strain. The naira changed hands around ₦1,490 per dollar on the parallel market on Wednesday, little changed from the previous session, leaving a spread of roughly ₦96 between the two rates.
That gap is the widest since early February, highlighting persistent unmet demand outside official channels.
The divergence underscores the uneven transmission of FX reforms across Nigeria’s currency ecosystem, with businesses and individuals still relying heavily on the informal market to source dollars.
External conditions have also played a role. A softer US dollar globally has provided modest support to frontier-market currencies, including the naira, easing pressure in recent sessions.
Looking ahead, Reuters reported that the naira is expected to remain relatively stable in the near term, underpinned by foreign portfolio inflows following a recent Nigerian bond auction and calmer dollar demand. The currency was quoted around ₦1,388 per dollar at the official market on Thursday, compared with about ₦1,419 a week earlier.
While the recent rally offers a measure of reassurance, traders say sustained confidence will depend on consistent FX supply, narrower market spreads and progress on broader structural reforms.
Discover more from Pluboard
Subscribe to get the latest posts sent to your email.