Nigeria’s currency, the naira, appreciated against the US dollar on Monday, closing at N1,597.7/$1 in the official foreign exchange (FX) market, according to data from the Central Bank of Nigeria (CBN). This reflects a modest but significant gain of N9.3 (0.58%) from last Friday’s closing rate of N1,607.0/$1.
Market Performance Overview
During intraday trading, the naira fluctuated between a high of N1,605.05/$1 and a low of N1,595/$1, settling at an average rate of N1,600.3/$1 in the Nigerian Foreign Exchange Market (NFEM).
Against the British pound sterling, the naira traded at N2,113.36/£1, underscoring persistent pressures from stronger global currencies.
In the parallel (black) market, the naira also showed resilience, appreciating to N1,623/$1 from N1,630/$1 last Friday. This narrowed the gap between official and unofficial rates to N25.3, marking one of the smallest differentials in recent weeks.
Expert Analysis: Improved FX Supply Bolsters Confidence
Financial analysts attribute the naira’s upward trend to a combination of increased foreign exchange supply by the CBN and stronger remittance inflows.
“The shrinking gap between the official and parallel market rates signals a decline in speculative dollar demand and a gradual restoration of confidence in the formal FX market,” said David Omale, a Lagos-based financial analyst.
CBN’s Policy Measures: Tangible Progress
The CBN has intensified efforts to unify exchange rates, enhance dollar liquidity, and discourage speculative trading. These strategies form part of a broader monetary tightening agenda, including interest rate hikes and controlled naira circulation, aimed at taming inflation and stabilizing the currency.
During the launch of the World Bank’s Nigeria Development Update in Abuja, CBN Governor Olayemi Cardoso reaffirmed the bank’s commitment to orthodox monetary policies. He noted that these measures are already producing visible results.
> “If we stay the course with orthodox monetary policy—which has already shown results—inflation will gradually moderate, and interest rates will begin to ease,” Cardoso emphasized.
He further highlighted that exchange rate volatility has dropped significantly to around 0.5%, compared to 4% a year ago, reflecting improved market stability.
Looking Ahead: Inflation Data on the Horizon
The National Bureau of Statistics (NBS) is expected to release fresh inflation data in the coming days. Analysts anticipate a potential easing of consumer prices in April, following a spike in March driven by rising fuel and food costs.
At its last meeting in February, the CBN’s Monetary Policy Committee (MPC) maintained the benchmark interest rate at 27.5%, continuing its tight monetary stance to combat inflation and stabilize the economy.
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