The Nigerian naira strengthened against the US dollar at the official exchange rate on Tuesday, marking a pause in recent depreciation. According to data from the Central Bank of Nigeria (CBN), the local currency traded at N1,401.40 to the dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM). This represented a gain of N4.22, or 0.3 per cent, from Monday’s closing rate of N1,405.62.
The marginal recovery follows a session where the naira had opened the week weaker, depreciating by 0.8 per cent on Monday. The two-day reversal ends a two-week declining trend for the currency at the official window. Market observers attributed the Tuesday improvement to a temporary balance in demand and supply dynamics within the regulated forex market after a period of sustained pressure.
Analysts noted that movements in the official segment remain highly sensitive to liquidity levels and direct interventions by monetary authorities. “The naira showed mild recovery on Tuesday after opening the week on a weaker note,” said a currency trader familiar with market operations, who requested anonymity. The trader’s comment underscores the volatility that has characterised the official market in recent sessions.
The Central Bank of Nigeria’s regular publication of daily forex rates provides transparency for the NAFEM, a window designed to facilitate legitimate foreign exchange transactions. The recent depreciation had raised concerns about underlying liquidity constraints, with dollar demand often outstripping supply in the official channel.
While the Tuesday appreciation offers a brief respite, analysts caution that sustained stability is not guaranteed. They emphasise that long-term exchange rate resilience hinges critically on increased foreign exchange inflows—from sources such as crude oil earnings, foreign direct investment, and portfolio flows—and a broader restoration of investor confidence in Nigeria’s foreign exchange management framework.
The central bank’s interventions have so far aimed to smooth excessive volatility, but fundamental pressures persist without a significant boost to dollar supply. The market will be watching for consistent trends in the coming days to determine if this recovery marks the start of a stabilisation phase or a fleeting correction within a longer downtrend.
