The Nigerian Naira strengthened significantly at the official foreign exchange market on Wednesday, appreciating by 1.8 per cent to trade at N1,376.19 to the United States dollar, according to data from the Central Bank of Nigeria (CBN).
This gain of N25.20 against the dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) follows a period of sustained pressure on the local currency. The Naira had depreciated for approximately two weeks prior to staging a recovery on Tuesday, with Wednesday’s move extending that upward trend.
Market analysts attributed the appreciation to two key factors: an improved supply of foreign exchange in the official market and the gradual impact of ongoing economic reforms. Some traders also pointed to increased foreign currency inflows from exporters and foreign portfolio investors as a contributing factor.
The CBN has consistently maintained that its suite of recent reforms is designed to enhance liquidity, transparency, and stability within the nation’s foreign exchange ecosystem. A market update on the regulator’s website formally noted the day’s positive movement, stating the Naira “appreciated by N25.20, representing a 1.8 per cent gain against the dollar at NAFEM.”
This development marks a tentative rebound for the currency after weeks of stress characterised by strong dollar demand and constrained supply. The improved sentiment in the official market contrasts with the persistent gap that often exists between the regulated NAFEM rate and the parallel market. For Nigeria, where many essential goods are imported, a stable and well-functioning official forex market is critical for controlling inflation and fostering economic confidence. The sustained nature of this recovery will depend on the continued effectiveness of the CBN’s policies in attracting and maintaining foreign exchange inflows.
