Naira Exchange Rate Strengthens Against US Dollar, Nears N1,350 Mark Amid Market Optimism

The Nigerian naira continued its upward movement against the US dollar in the official foreign exchange market on Wednesday, edging closer to the key N1,350/$ level. The local currency strengthened as improved demand dynamics and ongoing interventions from the Central Bank of Nigeria (CBN) supported market confidence.

At the close of trading, the naira settled around N1,357/$, reflecting a gain of nearly N10 from earlier levels. This marks a steady appreciation trend, with the currency rising from about N1,375.5/$ at the start of May to its current position—an overall gain of roughly 1.2% within just one week.

Market activity has also picked up significantly, with higher trading volumes pointing to more active price discovery in the FX market. Analysts note that traders and corporate players are increasingly responding to daily policy signals rather than engaging purely in long-term speculative positioning, making the market more responsive and fluid.

Broader economic expectations also suggest mixed pressure ahead. While strong interest rates continue to attract investors into naira-denominated assets such as Treasury Bills, an anticipated inflow of over N10.53 trillion from maturing securities in May could test the Central Bank’s ability to manage liquidity and potentially put renewed pressure on the currency later in the year.

On the global stage, the US dollar remains relatively stable but under mild pressure due to weaker economic data and shifting expectations around Federal Reserve policy. Investors are now closely watching upcoming US jobs data and central bank commentary, as any signals of policy easing or tightening could influence global capital flows and indirectly affect emerging market currencies like the naira.

source: nairametrics