Nigerian Currency strengthens to four-month high against US Dollar

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The Nigerian naira has extended its recent gains, strengthening to a four-month high against the US dollar. According to data from the Central Bank of Nigeria, the naira gained 0.74% to close at 1518/$ on the official market. This marks the naira’s strongest performance since March 14, 2025.

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Analysts at Anchoria Limited have projected that the naira would trade within a stable range of 1515-1535/$ this week, citing improved FX liquidity and renewed CBN intervention. “These actions have helped ease demand pressures and boost market confidence, keeping volatility low,” Anchoria Limited said. “We expect the naira should stay stable, supported by CBN supply and exporter inflows, as upside pressure may arise from rising demand.”

The Central Bank of Nigeria conducted an OMO auction, offering N600bn across two tenors, with total subscriptions standing at N2.17tn. Cowry Assets Management Limited projected a positive and stable outing for the naira this week, anchored on continued “CBN intervention, FX reforms gaining traction, and steady oil export revenues; the groundwork is gradually being laid for currency recovery and improved market sentiment.

In the parallel market, the naira closed trading at 1,540 per dollar, indicating an appreciation. However, it depreciated by 0.97% to settle at an average of 1,545/$1, down from 1,530/$1 the previous week. “This pullback erased part of the currency’s recent gains, even as the Central Bank of Nigeria continued its interventions to defend the naira. The rising gap between dollar demand and supply remains a core challenge, though recent reforms suggest a path toward greater currency stability in the near term,” Cowry Assets weekly report added.

CardinalStone stated that the naira’s stability was threatened by global risk-off sentiments, but the CBN’s interventions helped mitigate the impact. “We do not believe these interventions signalled a return to a fixed exchange rate regime or reflect an attempt to target a specific level for the naira,” CardinalStone added. 

“The bank’s average monthly FX intervention came in at $786.58m, materially lower than the $2.30bn pre-COVID and $1.38bn post-COVID levels previously used to defend the naira at unsustainable levels, despite underlying macro weaknesses. Encouragingly, both local and international observers now generally agree that the naira is trading close to its fair value.

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