The Nigerian naira has recorded a significant gain against the US dollar, driven by improved liquidity in the foreign‑exchange market. According to data from the Central Bank of Nigeria, the naira rose 0.72 percent to close at 1,455.17 per dollar in the official market last week, a gain of N10.5. A similar upward trend was observed in the parallel market, where the naira strengthened 0.88 percent to 1,475 per dollar.
The recent surge in the naira’s value is attributed to strong foreign inflows, particularly from foreign portfolio investors seeking to meet local fixed‑income obligations. Although the forex market initially dipped due to the exit of some foreign portfolio investors, a mid‑week influx of foreign funds helped stabilize the market. Improved US‑dollar supply and higher external reserves also contributed to the naira’s stability. External reserves rose to $42.57 billion, driven by increased inflows from oil sales, remittances and portfolio investments.
Analysts expect this development to support the naira’s stability in the near term, though rising import demand or weaker dollar inflows could slow further gains. The recent performance marks the strongest gain for the currency since December 2024. The improvement in the forex market is reflected in the Purchasing Managers’ Index, which jumped to 54.0 in September, according to the Central Bank of Nigeria.
In a review of the FX market, Cowry Assets Management Limited noted that the naira’s improvement was driven by better foreign‑exchange inflows, reducing pressure on demand. The firm expects the naira to remain stable in the near term, supported by steady FX inflows and Central Bank interventions. However, global oil‑market volatility and its impact on investor sentiment and Nigeria’s external earnings remain factors to watch.
The stability of the naira is crucial for Nigeria’s economy, given its reliance on imports and foreign investment. As the country navigates the complexities of the global economy, the performance of the naira will be closely monitored by investors, policymakers and other stakeholders.
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