The Nigerian Naira strengthened against the US dollar at the official foreign exchange market, closing the week on a positive note amid a decline in the country’s external reserves.
Data from the Central Bank of Nigeria (CBN) indicated that the local currency appreciated to N1,380.58 per dollar on Friday, improving from the previous day’s rate of N1,383.88. This represented a daily gain of N3.3. Compared to the rate of N1,353.90 recorded on Wednesday, March 18, the Naira gained a total of N26 over the week.
In the parallel (black) market, the exchange rate held steady at N1,420 per dollar on Friday, unchanged from Thursday’s level. This stability contrasts with the official market’s appreciation trend.
The currency movements occurred as the nation’s external reserves continued a downward trajectory, falling to $49.48 billion as of March 26. A decline in foreign reserves can limit the central bank’s capacity to support the currency in the official market and often correlates with pressure on the black-market rate.
The consistent appreciation in the official window suggests effective intervention by the Central Bank of Nigeria to manage liquidity and stabilize the exchange rate. However, the persistent gap of approximately N40 between the official and parallel market rates highlights ongoing imbalances in foreign exchange access.
Market analysts will watch whether the CBN can sustain this intervention amid shrinking reserves and monitor for any convergence between the two exchange rates. The Naira’s performance remains a critical indicator for inflation, business costs, and overall economic stability in Africa’s largest economy.
