By Seun Ibiyemi
The Nigerian naira strengthened against the United States dollar at the official foreign exchange market on Monday, continuing its recent recovery amid improved liquidity and sustained interventions by the Central Bank of Nigeria (CBN).
Data from the Nigerian Foreign Exchange Market (NFEM) showed that the naira closed at N1,366.79 per dollar, compared to N1,373.25 per dollar recorded at the close of the previous trading session, reflecting an appreciation of N6.46.
The latest performance signals continued resilience in the foreign exchange market as the local currency benefits from improved interbank transactions, stronger liquidity conditions and rising foreign exchange inflows.
Market data indicated that the official exchange rate traded within a range of N1,360 and N1,374.50 per dollar during the trading session, reflecting relatively stable market conditions and the absence of significant demand pressures.
At the parallel market, however, the naira remained largely unchanged, trading at about N1,390 per dollar, indicating a relatively narrow gap between the official and unofficial market segments.
Analysts attributed the currency’s improved performance to sustained foreign exchange liquidity, increased inflows from crude oil export proceeds and the continued implementation of market reforms by the Central Bank aimed at improving transparency and reducing exchange rate volatility.
Recent market trends have shown increasing convergence between the official and parallel market rates, a development analysts say reflects improved confidence in the foreign exchange market and reduced speculative activity.
The naira had closed the month of May at approximately N1,372 per dollar, maintaining relative stability throughout the month despite persistent demand for foreign currency and global economic uncertainties.
Financial market observers noted that Nigeria’s rising external reserves and improved foreign exchange supply have continued to provide support for the local currency, helping to moderate volatility across the market.
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They added that sustaining the current stability would depend on continued foreign exchange inflows, stronger oil revenue performance and the consistency of monetary and foreign exchange policies.
The development comes as businesses, investors and manufacturers closely monitor currency movements amid efforts to improve economic stability, manage import costs and strengthen investor confidence in the Nigerian economy.
Market participants are expected to keep watch on foreign reserve levels, crude oil earnings and policy signals from the Central Bank as key factors that could influence the direction of the naira in the coming weeks.
