The Nigerian naira appreciated against the United States dollar on Monday, breaking through the ₦1,500/$ barrier for the first time in more than six months. Data from the Central Bank of Nigeria (CBN) showed the local currency closed at ₦1,497.46/$ at the Nigerian Foreign Exchange Market (NFEM), stronger than Friday’s ₦1,503.5/$, marking an ₦8.5 gain.
This marks the first time since February 2025 that the naira has traded below ₦1,500/$ in the official window. Analysts link the appreciation to strong foreign portfolio inflows, healthy external reserves, and ongoing policy interventions by the CBN.
The positive sentiment was also reflected in the parallel market, where the naira appreciated to ₦1,525/$, up from ₦1,538/$ recorded last weekend. The margin between the official and parallel markets narrowed to ₦30/$, compared to ₦34.5/$ a week earlier.
According to CardinalStone Research, the naira gained 0.98 per cent week-on-week to close at ₦1,501.50/$ in the official market, while the parallel market strengthened by 0.33 per cent to ₦1,535/$. The Coronation Weekly Update added that the official rate ended the week at a ₦35.50 or 2.23 per cent premium to the parallel market, indicating a narrowing gap between both markets.
Foreign exchange inflows into Nigeria also supported the rally, hitting $550.90 million last week. Foreign Portfolio Investments (FPIs) accounted for the bulk at $303.8 million or 55.15 per cent. Exporters contributed 17.61 per cent, non-bank corporates 17.57 per cent, other corporates 4.32 per cent, Foreign Direct Investments 3.39 per cent, while the CBN and individuals made up the rest.
AIICO Capital noted that the market tone last week was buoyed by “ample dollar liquidity from FPIs, oil exporters, and offshore flows.” It added, “The FX market is expected to maintain its current stability, supported by the CBN’s continued policy adjustments and fiscal efforts to ensure adequate liquidity.”
Similarly, Cowry Asset Management Limited said the naira’s rebound is being driven by consistent inflows and stronger reserves but warned that “renewed speculative activity could spark volatility.”
Nigeria’s external reserves also rose to $41.69 billion as of Friday, reflecting steady accretions that are expected to boost market confidence. Analysts, however, cautioned that the sustainability of the recovery depends on structural reforms, diversification of forex sources, and policies that attract long-term investments.
For now, the naira’s return below ₦1,500/$ signals renewed confidence in Nigeria’s foreign exchange market. But with demand pressures likely to rise ahead of the festive season, experts say the coming weeks will determine whether the domestic currency can sustain its gains.
