The Nigerian naira continued to show resilience in the foreign exchange market, trading around N1,367 to the US dollar as the Central Bank of Nigeria (CBN) maintained measures aimed at keeping the currency stable. The naira opened the final trading day of the week at about N1,366.5/$, reflecting a relatively calm session despite ongoing pressure in the global currency market.
Market trends suggest that the dollar may face stronger resistance against the naira in the short term, particularly around the N1,400/$ psychological barrier. Continued CBN interventions, dollar sales to Bureau de Change operators and other authorised dealers, alongside foreign exchange supplies from local banks, have helped reduce sharp movements in the exchange rate.
Nigeria’s foreign exchange reserves, estimated at about $52.5 billion, are also providing an important cushion for the currency. The reserves offer the CBN greater room to respond to speculative pressure and support market liquidity. However, analysts note that keeping the naira within the N1,350/$–N1,375/$ range will depend heavily on sustained reserve strength, oil earnings and the effectiveness of the central bank’s currency-management measures.
High interest rates are another major part of the CBN’s strategy. With the Cash Reserve Ratio at 45% and monetary policy remaining tight, the central bank is working to control excess naira liquidity and persistent inflation. At the same time, growing interest from local and international investors in naira-denominated assets, including government bonds and money market instruments, could provide additional demand for the local currency and support stability.
Looking ahead, the naira is expected to remain largely range-bound in the short term, although inflation differences between Nigeria and the United States could create some depreciation pressure over the medium term. Strong crude oil prices and steady foreign exchange inflows could strengthen the naira further, while increased corporate dollar demand or liquidity shortages could push the exchange rate toward the N1,420–N1,450/$ zone. Meanwhile, movements in the US dollar index, Federal Reserve policy and tensions surrounding US-Iran relations could add another layer of uncertainty to the global currency market.
source: nairametrics
