The Nigerian naira closed last week on a strong note, trading at N1,514.86 per United States dollar at the official window, marking its highest level in nearly five months. Data released by the Central Bank of Nigeria (CBN) confirmed the development, underscoring a promising start to September for the domestic currency.
The naira had opened the month at N1,526.09/dollar but firmed up by over N11 to close at N1,514.86/dollar on Thursday at the Nigerian Foreign Exchange Market. The last time the local currency appreciated to this level was on March 6, when it closed at 1,512.30 Naira/Dollar. The current trend signals renewed momentum in the CBN’s efforts to stabilise the exchange rate and restore market confidence.
The strengthening of the naira was not limited to the official window alone. At the parallel market, the currency also recorded marginal gains, appreciating to 1,538 naira/dollar, reflecting a 0.02 per cent improvement against the greenback. Although modest, analysts say the convergence of rates across both markets suggests improving confidence in Nigeria’s foreign exchange framework.
Market watchers attribute the naira’s recovery to improved liquidity conditions and sustained inflows of foreign exchange into the system. In recent months, the CBN has ramped up interventions to address dollar shortages, with recent figures showing that the apex bank injected about 15bn dollars into the market to bolster supply and reduce speculative pressure.
Financial analysts note that consistent inflows, particularly from non-oil exports and foreign investment, have contributed to easing demand pressures. They argue that as long as liquidity remains steady and the CBN sustains its interventions, the naira could maintain its current trajectory and possibly strengthen further in the coming weeks.
Despite the recent gains, concerns remain about the sustainability of the rebound. Experts warn that external shocks such as fluctuations in global oil prices, portfolio outflows, or a sudden surge in demand for dollars could quickly reverse the gains. They emphasise that broader structural reforms, including measures to boost domestic production and reduce import dependence, are necessary to guarantee long-term currency stability.
Nonetheless, the latest figures represent a morale boost for the government and the financial markets. For many stakeholders, the naira’s appreciation offers a signal that ongoing monetary reforms are beginning to yield results, even as the CBN continues to walk the tightrope of balancing liquidity management, inflation control, and exchange rate stability.
