Naira Strengthens Against Dollar as Global Markets Fluctuate

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The Nigerian naira has strengthened against the US dollar in both the official and black markets. In the official market, the naira traded at N1,549 per dollar, a marginal appreciation from N1,550 per dollar previously. In the black market, the naira settled at N1,590 per dollar, up from N1,595-N1,600 per dollar on Tuesday.

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The Central Bank of Nigeria’s (CBN) supportive foreign exchange interventions, macroeconomic policy changes, and foreign capital inflow policies are expected to maintain the naira’s exchange rate at these levels in the midterm. According to analysts, improved sentiment driven by economic reform programs has boosted foreign investors’ confidence in the Nigerian capital market.

Globally, the US dollar has plummeted to a 3-year low, influenced by US President Donald Trump’s calls for lower interest rates and criticism of Federal Reserve Chair Jerome Powell. The dollar index has fallen to record lows against six major currencies, down 10% this year due to Trump’s proposed tariffs and trade policy uncertainty.

“The impact of tariffs on inflation remains uncertain, and will keep central banks, especially the Federal Reserve, in a conservative stance,” Bank of America strategists noted, highlighting downside risks.

The US Federal Reserve is expected to release its preferred inflation indicator, the PCE inflation index, on Friday, which will likely impact market sentiment. Meanwhile, the US Treasury Secretary has announced an extension of the debt issuance suspension period, citing potential difficulties in meeting obligations unless the debt ceiling is raised or suspended.

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