The Nigerian naira strengthened against the US dollar on the official foreign exchange market on Monday, marking a continued appreciation trend for the local currency. According to data from the Central Bank of Nigeria (CBN), the naira closed at N1,357.77 per dollar, a significant gain of N8.46 from the N1,366.23 rate recorded at the end of trading on Friday.
This movement underscores a sustained rally in the official market, where the currency has shown notable firmness in recent sessions. The appreciation follows a period of intense pressure on the naira and reflects ongoing efforts by monetary authorities to stabilize the official exchange rate.
In contrast, the parallel market presented a different picture. Reports indicated that the naira weakened by N5 in the black market, trading at N1,430 per dollar on Monday, down from N1,425 the previous week. This divergence highlights the persistent gap between the official and unofficial foreign exchange rates, a common characteristic of Nigeria’s multi-layered forex market.
The currency’s mixed performance across markets coincided with the release of key economic indicators. The National Bureau of Statistics reported a slight decline in the country’s headline inflation rate to 15.06 percent in February. Furthermore, CBN data showed a rise in Nigeria’s gross foreign reserves to $50.027 billion, a development that typically bolsters the central bank’s capacity to defend the official exchange rate.
The confluence of a softening inflation figure and growing external reserves provides a somewhat supportive backdrop for the naira’s official rate. However, the sustained premium in the black market points to underlying demand-supply imbalances and continued access challenges in the formal foreign exchange window.
The naira’s trajectory remains a critical focal point for Nigeria’s economic policy. The central bank’s measures to attract foreign currency and manage liquidity appear to be yielding results on the official front. The persistence of a wide parallel market spread, however, suggests that underlying structural issues in forex allocation and confidence have not been fully resolved. Market observers will watch for whether the official market’s gains can be consolidated and if the gap with the parallel rate narrows in the coming weeks.
