Naira Strengthens Below N1,360/$ for First Time in Four Weeks as Forex Reforms Boost Market Confidence

Nigeria’s currency recorded a significant milestone on Thursday as the naira strengthened below the N1,360/$ mark for the first time in four weeks, reflecting growing confidence in the country’s foreign exchange market. Data released by the Central Bank of Nigeria (CBN) showed the local currency closed at N1,359.75/$ on June 4, 2026, a slight improvement from N1,360.00/$ recorded a day earlier. The development marks the first time the naira has traded below the threshold since May 7, reinforcing signs of increased market stability.

The latest appreciation comes amid sustained foreign exchange reforms and improving liquidity conditions within the official market. Throughout Thursday’s trading session, the naira traded within a relatively narrow range of N1,356.75/$ and N1,361.50/$, indicating reduced volatility. The simple mean exchange rate settled at N1,359.138/$, while interbank foreign exchange turnover reached $128.17 million across 121 transactions, highlighting active participation among financial institutions.

Analysts attribute the currency’s resilience to a combination of stronger foreign exchange inflows and rising external reserves. Nigeria’s gross external reserves climbed to $49.96 billion as of June 3, 2026, representing an increase of more than $155 million within 24 hours. The reserve position has continued to improve steadily, with official figures showing gains of approximately $1.22 billion during May alone, providing additional support for the country’s foreign exchange market.

Recent policy actions by the CBN have also played a crucial role in restoring investor confidence. The apex bank recently unveiled the Fourth Edition of its Foreign Exchange Manual, introducing several measures aimed at improving market transparency, governance, and operational efficiency. Among the key changes is the increase in allowable advance payment for imports from 15% to 30%, a move expected to facilitate smoother trade transactions and improve access to foreign exchange for businesses.

Market observers believe the combination of policy reforms, rising reserves, stronger oil export earnings, remittance inflows, and increased portfolio investments is gradually strengthening the naira’s position. The currency closed May 2026 at N1,372/$ compared to N1,585.50/$ in the corresponding period of 2025, underscoring the progress made over the past year. While challenges remain, the naira’s return below N1,360/$ is being viewed as another positive signal that recent reforms may be supporting long-term exchange rate stability and investor confidence in Nigeria’s economy.

source: nairametrics