The Naira appreciated to N1,445 against the American dollar in the parallel market from N1,455 per dollar on Wednesday.
The Naira has made a notable recovery from its earlier meltdown this year and is currently on a significant upward trend.
This strengthening can be attributed to improved economic fundamentals and effective policy interventions, resulting in fewer Naira needed to buy one US dollar. The USD/NGN exchange rate sits at approximately N1,445/$, reflecting a slight decrease amid the Naira’s positive trajectory in the unofficial market
According to reports from Bureau De Change (BDC) operators in major cities like Lagos and Abuja, the exchange rate against the US dollar is approximately N1,450–N1,460 for selling and N1,445–N1,455 for buying.
This stability is a result of increased dollar liquidity from remittances and unofficial inflows, and it persists in the face of external pressures, such as recent US political rhetoric.
Over the past month, the Naira has appreciated by roughly 2 per cent, and over the past year, it has gained 15 per cent against the US dollar.
This upward movement has been particularly noticeable since late October, as the Naira has fallen below the psychologically significant threshold of N1,500 per dollar for the first time in months.
The Nigerian currency closed last month at N1,427.50 per dollar on the official Nigerian Foreign Exchange Market (NFEM) and has been trading steadily in early November between N1,421 and N1,445. Additionally, the exchange rates in the parallel (black) market have come closer to the official levels.
The CBN has tightened monetary policy and increased forex sales under Governor Olayemi Cardoso, reducing speculation. This entails injecting liquidity to reduce demand pressures and more successfully unifying exchange rates.
These actions have helped control inflation by lowering the amount of money in circulation below N5 trillion for two consecutive months (August–September).
U.S dollar index holds 100 support line
The US Dollar Index (DXY), which measures the strength of the US dollar against a basket of six major world currencies, is currently trading at 100. The ongoing US government shutdown, now the longest in history, raises concerns about potential financial losses and contributes to the decline of the DXY.
The U.S government shut down on October 1 due to a deadlock in Congress over funding negotiations earlier weighed on the American dollar. The uncertainty surrounding this extended shutdown has weakened the DXY’s resolve to maintain a bullish trajectory.
The American Senate is not scheduled to vote on a House-passed bill to reopen the government until Thursday, following a failed attempt to reach an agreement for the fourteenth time on Tuesday.
In the meantime, a snapshot of the American labor market, which is under increased scrutiny due to the lack of official federal jobs data, shows that private-sector job creation improved in October.
According to Automatic Data Processing (ADP), private sector employment in the US rose by 42,000 in October, compared to a revised decline of 29,000 in the previous month.
This figure exceeded the 25,000 estimates. Federal Reserve Chair Jerome Powell noted a “very gradual cooling” in the labor market but indicated that there is no indication of more significant changes.
He added that there is no guarantee of another interest rate cut at the Fed’s upcoming meeting in December. Fed Governor Stephen Miran commented that the October employment data was “a welcome surprise” but also stated that “policy is too restrictive,” suggesting that another rate cut might be needed in December.
