The Nigerian naira has strengthened to N1,322.50 per US dollar at the official foreign exchange market, continuing its recent positive run against the dollar.
The latest rate was recorded at the Nigerian Foreign Exchange Market (NFEM), according to data from the Central Bank of Nigeria.
The naira’s recent appreciation has been linked to improved foreign exchange liquidity, stronger dollar inflows and rising external reserves.
The development represents a significant improvement from the much weaker levels recorded by the naira in previous years and marks one of the currency’s strongest performances in recent times.
Nigeria’s external reserves have also continued to rise, providing additional support for the country’s foreign exchange market. Recent reports put the reserves above $53 billion, with increased crude oil receipts, foreign investment inflows and diaspora remittances contributing to improved dollar supply.
Analysts have also pointed to ongoing reforms in the foreign exchange market and improved price discovery as factors supporting the naira’s recent gains.
The narrowing gap between the official and parallel markets has further indicated improved conditions in the foreign exchange market.
At the parallel market, the dollar has recently traded around the N1,395 per dollar level, although rates vary depending on the market and transaction.
The strengthening of the naira could provide some relief for businesses and consumers whose costs are directly or indirectly affected by movements in the exchange rate. However, the extent to which the gains will translate into lower prices for goods and services will depend on how sustained the appreciation becomes.
Financial analysts have cautioned that the naira’s outlook will continue to depend on foreign exchange liquidity, crude oil prices, capital inflows, remittances and broader developments in the global currency market.
For now, the movement towards the N1,300 range represents a notable improvement in the naira’s recent performance and offers a positive signal for Nigeria’s foreign exchange market.
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