Nigeria’s currency, the naira, appreciated against the US dollar at the official foreign exchange market on Monday, closing at N1,597.7/$1, according to data published on the Central Bank of Nigeria (CBN) website.
This marks an improvement from N1,607.0/$1 recorded last Friday, indicating a gain of N9.3 or 0.58% over the weekend.
In-day trading data showed the naira fluctuated between a high of N1,605.05/$1 and a low of N1,595/$1, with a simple average rate of N1,600.3/$1 at the Nigerian Foreign Exchange Market (NFEM).
Meanwhile, the naira traded at N2,113.36/£1 against the British pound sterling, reflecting continued pressure from stronger currencies across major FX pairs.
In the black market, the naira also showed signs of strength, appreciating slightly to N1,623/$1 on Monday from N1,630/$1 on Friday. This reduced the gap between the official and parallel market rates to just N25.3, one of the narrowest margins recorded in recent weeks.
Analysts React
Analysts attribute the naira’s recent appreciation to improved FX supply from the Central Bank of Nigeria and stronger remittance inflows.
The apex bank has sustained its efforts to clear outstanding FX backlogs and implemented reforms aimed at improving transparency and investor confidence.
“The narrowing spread between official and parallel market rates suggests that speculative demand for dollars is reducing, while confidence in the formal FX window is gradually returning,” said David Omale, a Lagos-based financial analyst.
CBN policies showing results
The CBN has intensified efforts to unify the exchange rate, improve dollar liquidity, and curb speculative trading as part of its recent policy direction. These initiatives form a key part of a broader monetary tightening campaign, which includes raising interest rates and reducing naira supply in a bid to tame inflation and stabilize the currency.
Speaking at the launch of the World Bank’s Nigeria Development Update in Abuja on Monday, CBN Governor Olayemi Cardoso affirmed the bank’s commitment to orthodox monetary policy, which he said is already yielding results.
“If we continue with our course of orthodox monetary policy—which has already shown results—then inflation will moderate over time. Alongside that, interest rates will also begin to ease,” Cardoso stated.
He further noted that the CBN remains focused on its core mandate of price and financial stability, highlighting that foreign exchange market volatility has now dropped to about 0.5%, compared to 4% a year ago.
More insights
The National Bureau of Statistics is set to release inflation report in the next few days with analysts predicting that the stubbornly high consumer prices may likely wane in April after picking up a month before on rising fuel and food prices.
At its 299th meeting in February, the Cardoso-led Monetary Policy Committee held rates steady at 27.5%, the position it stood when it last met in November 2024.
