Naira Records Six-Month High at N1,506.84 as Dollar Supply Improves
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Naira Records Six-Month High at N1,506.84 as Dollar Supply Improves |
The naira hits a six-month high of N1,506.84/$ as FX supply stabilizes, boosted by foreign portfolio inflows and improved investor confidence.
The Nigerian naira recorded a major recovery on Monday, strengthening to N1,506.84 per dollar at the official foreign exchange (FX) market. This marks its highest level in six months, reflecting improved dollar supply and renewed investor confidence in Nigeria’s economy.
Naira Gains Ground in the FX Market
According to data from the Central Bank of Nigeria (CBN), the naira appreciated by 0.5%, gaining N8.02 against the previous close of N1,514.86/$1 quoted last week.
The last time the local currency traded stronger than this was on March 5, 2025, when it appreciated to N1,500.80 per dollar. Analysts attribute this rise to steady inflows from foreign portfolio investors (FPIs) and increased market stability.
For more details on Nigeria’s monetary policy, visit the CBN official website.
Performance in the Parallel Market
In the parallel (black) market, the naira also showed resilience, appreciating by N15 to close at N1,520/$ on Monday, compared to N1,535/$ the previous week.
Similarly, Guaranty Trust Bank (GTBank) quoted N1,520 per dollar for international transactions on Monday, down from N1,533/$ on Thursday, reflecting a N13 appreciation in just a few days.
NAFEM and FPI Inflows Drive Stability
The Nigerian Autonomous Foreign Exchange Market (NAFEM) reference rate appreciated by 6.59% last week, closing at N1,514.87/$1. Analysts at Coronation Merchant Bank expect the exchange rate to hover between N1,500/$ and N1,600/$ in the near term, supported by consistent inflows from FPIs.
Recent figures highlight:
- FX inflows into Nigeria rose 4% quarter-on-quarter (Q1 2025).
- Year-on-year inflows jumped 26%, reaching $29 billion.
- FPI inflows surged 101% y/y to $4.9 billion, according to FMDQ Group data.
These inflows remain a major driver of naira stability, improving liquidity in the foreign exchange market.
What This Means for the Nigerian Economy
The naira’s upward movement signals a gradual return of stability to Nigeria’s FX market. For businesses and individuals, a stronger naira means:
- Reduced import costs for essential goods.
- Lower inflationary pressures in the medium term.
- Improved investor confidence, encouraging more inflows.
However, analysts caution that the exchange rate is still vulnerable to fluctuations if supply weakens or demand spikes.
Conclusion
The naira’s six-month high at N1,506.84/$ is a positive sign for Nigeria’s economy, driven by robust foreign portfolio inflows and better FX supply. If this momentum continues, the market could stabilize further, giving businesses and consumers much-needed relief.
For ongoing updates on the FX market, you can check the FMDQ Exchange official page.
