Naira Strengthens Below ₦1,500/$ for First Time Since March as Economic Reforms Boost Confidence

The Nigerian naira continued its winning streak mid-week, breaking through the symbolic ₦1,500/$ barrier in the official foreign exchange market for the second time this year. The currency closed at ₦1,500.91 to the U.S. dollar on Wednesday – its strongest level since March 5, 2025 – as investor confidence in Nigeria’s ongoing economic reforms deepens.

Trading data from the Nigerian Foreign Exchange Market showed the naira fluctuating within a tight range of ₦1,498/$ to ₦1,507/$ throughout the session, signaling stronger demand for the local currency. The naira had already held firm at ₦1,506/$ on Monday and Tuesday before gaining further ground mid-week. This upward momentum contrasts with its marginally weaker performance at the parallel market, where it hovered between ₦1,510/$ and ₦1,512/$.

Market analysts link the naira’s recovery to the Central Bank of Nigeria’s (CBN) policy drive to stabilize exchange rates, curb speculative trading, and attract foreign investment. These measures, including tightening liquidity around foreign exchange transactions and prioritizing transparency, have started to reduce volatility and restore confidence. Businesses listed on the Nigerian Stock Exchange are also reporting some relief, with import costs easing slightly as the local currency firms.

Despite the naira’s resilience, global currency trends remain mixed. The U.S. Dollar Index (DXY), which measures the greenback’s strength against major currencies, was flat at 97.85 during London trading. Analysts say expectations of a U.S. Federal Reserve rate cut next week – after weaker-than-expected Producer Price Index (PPI) data – could pressure the dollar further and shape emerging-market currencies like the naira.

Meanwhile, global markets are also reacting to political and economic developments in the U.S. and Europe. The Trump administration’s appeal over a blocked attempt to fire Federal Reserve Governor Lisa Cook and the likely nomination of Stephen Miran to the Fed are fueling debate over U.S. interest rate policy. In Europe, the euro steadied ahead of a European Central Bank meeting, while tensions escalated on the bloc’s eastern border after Poland intercepted Russian drones with NATO support.

Source: Nairametrics