The Nigerian naira recorded its strongest performance in four months on Monday, appreciating to ₦1,518/$ on the official market. This rebound marks a notable turnaround from recent weeks, when the naira closed at ₦1,530.26/$ last Friday. The Central Bank of Nigeria (CBN) reported a 0.74% gain, with analysts pointing to increased FX liquidity, improved investor confidence, and recent market interventions. This marks the first time since March 14 that the naira traded below ₦1,520/$, signaling growing optimism around the currency’s trajectory.
Analysts at Anchoria Limited attributed the recent gains to last week’s successful $50 million forex sale and a high-demand Open Market Operation (OMO) auction, which attracted over ₦2 trillion in subscriptions. These measures, they explained, have helped reduce volatility, ease demand pressures, and boost market sentiment. The naira is expected to stay within the ₦1,515–₦1,535/$ range this week, supported by steady supply from exporters and continued CBN interventions.
Cowry Assets Management also projected a stable performance for the naira, citing sustained FX reforms, oil revenue inflows, and ongoing market support from the CBN. However, they noted that rising dollar demand and tight FX supply remain key risks. At the parallel market, the naira strengthened slightly to ₦1,540/$, following a slight dip earlier in the week that pushed it to ₦1,545/$, wiping out some of its earlier gains.
In its mid-year outlook, Cardinal Stone emphasized that the CBN’s interventions reflect a flexible approach to exchange rate management rather than a return to a fixed regime. Despite global shocks and capital outflows totaling $22.83 billion in H1 2025, the CBN’s measured actions and lower intervention volumes compared to pre-COVID levels suggest a more sustainable path forward. Encouragingly, both domestic and international observers now believe the naira is trading near its fair value.
Source: Punch