Nigeria’s naira regained ground on Tuesday after a temporary slump on Monday, signaling renewed confidence in the country’s economic stability. The brief drop came amid concerns over a statement by former U.S. President Donald Trump, who threatened military action and aid cuts over alleged religious persecution in Nigeria. Analysts say the market rebound shows resilience despite geopolitical uncertainties.
Data from the Central Bank of Nigeria (CBN) revealed that the naira had weakened to N1,436.34 to the dollar on Monday from N1,421.73 the previous week. By Tuesday, the currency strengthened slightly, closing at N1,433.65 to the dollar in the official forward exchange market. This modest recovery helped calm nerves among investors and traders.
The parallel market mirrored the official trend. After dipping to N1,460 on Monday, the naira improved to sell between N1,450 and N1,451 by Tuesday evening. Currency dealers credited the stabilization to moderate demand and increased supply from informal sources, which cushioned the market from external pressures.
Meanwhile, the Nigerian Treasury Bill (NTB) market showed signs of bullish activity. The average yield contracted by three basis points to 17.4%, with notable movements along the yield curve driven by investor demand for medium- and long-term bills. Conversely, yields in the Open Market Operations (OMO) segment expanded by 21 basis points, reflecting active profit-taking in some short-term instruments.
Similarly, the Federal Government of Nigeria (FGN) bond market traded on a positive note, with average yields slightly declining to 15.8%. Market movements varied across maturities, with short-term bonds experiencing modest expansion, while mid- and long-term bonds contracted due to strong investor demand. The trends underline cautious optimism among traders, suggesting the naira and broader financial markets are regaining footing.
source: Leadership