The Nigerian Naira strengthened against the US dollar across both official and parallel foreign exchange markets on Wednesday, marking sustained appreciation in the nation’s currency.
According to Central Bank of Nigeria (CBN) data, the official exchange rate improved to N1,348.95 per dollar, up from N1,351.02 the previous day. This represented a gain of N2.07 for the Naira in a single session. Over the preceding three trading days, the cumulative improvement at the official window reached N5.51 against the dollar.
In the parallel market, the Naira appreciated to a reported high of N1,445 per dollar, down from N1,450 on Tuesday. This movement follows a recent CBN directive restricting the weekly sale of foreign exchange to licensed Bureau De Change (BDC) operators to a maximum of $150,000. The policy is part of ongoing efforts by the central bank to streamline forex distribution and curb volatility in the retail segment of the market.
The currency’s gains coincide with a growth in Nigeria’s foreign exchange reserves. Data shows reserves rose to $47.38 billion as of February 9, 2024, up from $47.03 billion recorded on February 6. This increase provides a larger buffer for the CBN to defend the naira and meet official demand.
The Naira’s recent performance marks a shift from the pronounced depreciation witnessed throughout 2023. The convergence between official and parallel market rates, which had previously reflected a significant gap, appears to be narrowing—a key indicator of improving market confidence and effective policy implementation. Analysts note that the combination of managed forex allocation, increased reserve accretion, and dedicated BDC liquidity measures are contributing to the current trend.
Market observers will be watching closely to determine if this appreciation can be sustained beyond immediate policy-driven support. The CBN’s continued commitment to market transparency and reserve management remains critical for long-term exchange rate stability. The narrowing spread between the official and black-market rates is particularly significant, as it suggests a reduction in speculative pressure and a move toward a more unified exchange rate regime.
