Naira Strengthens Against Dollar in FX Markets

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The naira has appreciated against the dollar across the foreign exchange markets, continuing a trend of relative currency stability driven by ongoing reforms. At the Nigerian Foreign Exchange Market (NFEM), the naira strengthened marginally by N0.14, closing at N1,529.57 per dollar compared to N1,529.71 on Monday.

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The naira also recorded gains in the parallel market, appreciating by N10 to close at N1,560, representing a 0.6 percent increase from the N1,570 recorded the previous day. According to analysts at Access Bank, sustained Foreign Portfolio Investor (FPI) inflows are expected to keep downward pressure on exchange rates in the near term, provided the current momentum in capital inflows is maintained.

“Looking ahead, sustained FPI inflows are expected to keep downward pressure on exchange rates in the near term, provided the current momentum in capital inflows is maintained,” said analysts at Access Bank.

The foreign exchange market recorded a notable boost in US dollar liquidity last week, driven by increased inflows from FPIs and stronger sell-side participation. The improved supply supported a modest appreciation of the naira, which gained N6.43 to close at N1,545.20 per US dollar.

However, according to exchange rate data compiled by Afreximbank and other sources, Nigeria’s naira posted the worst performance among African currencies, weakening by 131.8 percent against the US dollar between 2023 and 2024. “Nigeria’s naira fell from N636.13 to N1,474.60 to the dollar, following ongoing efforts by the Central Bank of Nigeria to unify exchange rates and attract foreign inflows amid persistent FX shortages and high inflation,” the report stated.

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