Naira strengthens to N1,341.99/$, hits two-month high amid improved market sentiment
The naira continued its upward movement on Wednesday, closing at N1,341.99/$ at the official foreign exchange market—its strongest level since February 18, 2026. Data from the Central Bank of Nigeria shows the local currency has gained steadily in recent days, reflecting renewed short-term confidence among investors and market participants.
This latest appreciation marks a consistent climb from N1,358/$ recorded on Monday and N1,348/$ on Tuesday. On a week-on-week basis, the naira has also strengthened from N1,369/$ seen on April 8, suggesting a gradual recovery after weeks of volatility. Analysts say the trend points to improving sentiment in the official market, even as broader economic conditions remain mixed.
However, underlying pressures persist. Nigeria’s external reserves dropped to $48.72 billion as of April 13, down from $49.18 billion at the start of the month. Meanwhile, activity in the parallel market continues to tell a different story, with forex traders attributing exchange rate volatility to speculation, fiscal leakages, and limited liquidity at the retail end. The gap between official and black market rates remains a key concern for policymakers.
Global factors have also played a role in the naira’s recent gains. A softer U.S. dollar, driven by improving investor sentiment and expectations of renewed diplomatic engagement between the United States and Iran, has supported emerging market currencies. At the same time, rising oil prices—amid supply concerns linked to tensions around the Strait of Hormuz—have added another layer of influence, with Brent crude trading near $95 per barrel.
Despite the positive currency movement, Nigeria’s macroeconomic outlook remains under pressure. The International Monetary Fund recently revised the country’s 2026 growth forecast downward to 4.1%, while inflation edged up to 15.38% in March. Even so, the Central Bank maintains a cautiously optimistic outlook, projecting external reserves to rise to $51.04 billion in 2026, signalling potential stability if current reforms and inflows improve.
source: nairametrics