Naira Strengthens to ₦1,531.57/$ as CBN Interventions and Rising Reserves Bolster FX Market

The Nigerian naira appreciated to ₦1,531.57 per dollar on Friday, marking a 0.23% gain week-on-week in the official foreign exchange window. This rebound reflects renewed market confidence, after the local currency closed July weaker at ₦1,533.55/$ compared to June’s ₦1,529.71/$. On a month-to-month basis, the naira has clawed back some stability, showing a 0.13% appreciation from July levels.

Nigeria’s external reserves also strengthened, rising to $41.27 billion as of Friday, up from $41 billion earlier in August. Analysts attribute this improvement to consistent dollar inflows and Central Bank of Nigeria (CBN) reforms aimed at restoring market confidence and liquidity. The reserves boost has provided a cushion for the naira amid fluctuating demand pressures.

Market watchers at Cowry Assets Management noted that both official and parallel markets saw modest gains, with the naira appreciating 0.37% to ₦1,538.33/$ in the informal segment. They highlighted that reduced speculative trading and improved liquidity helped ease pressure on the local currency. Analysts, however, cautioned that rising demand and a stronger U.S. dollar could cap further gains.

Meanwhile, investment firm AIICO Capital observed that the week opened with high dollar demand, briefly pushing rates to ₦1,540/$. However, CBN interventions—including an estimated $70 million in sales across sessions—helped stabilize trading within the ₦1,525–₦1,538/$ range. By week’s end, stronger dollar supply and moderated demand anchored the naira’s appreciation.

Looking ahead, experts forecast that the naira will trade within a stable band in the near term, supported by CBN interventions and steady FX inflows. PwC, in its 2025 Economic Outlook, echoed this projection, predicting that the naira will remain broadly stable for the rest of the year, driven by sustained reforms and increased portfolio investments.