By Seun Ibiyemi
The naira maintained a relatively stable performance against the United States dollar on Tuesday, supported by improved foreign exchange liquidity and rising external reserves, signaling continued stability in Nigeria’s foreign exchange market.
Data from the Nigerian Foreign Exchange Market (NFEM) showed that the local currency traded around ₦1,373.25 to the dollar at the official market, remaining within the ₦1,370–₦1,372 range recorded in recent sessions.
The performance comes after the naira opened the week on a stronger note, appreciating by about ₦8.46 against the dollar at the official market on Monday to close at ₦1,366.79/$ from ₦1,375.25/$ recorded at the end of last week.
Market analysts attributed the currency’s resilience to sustained foreign exchange inflows, improved investor confidence and the rebound in Nigeria’s external reserves, which climbed to about $49.58 billion at the end of May.
In the parallel market, the dollar traded between ₦1,395 and ₦1,405, reflecting a relatively narrow gap with the official exchange rate compared to wider spreads seen in previous months.
Currency dealers said the reduced disparity between both markets points to improving transparency and liquidity in the foreign exchange market, supported by ongoing reforms introduced by the Central Bank of Nigeria (CBN).
The naira also strengthened against other major international currencies in recent official market transactions. Data showed gains against the British pound and the euro, reflecting broader support for the local currency amid improving forex market conditions.
Analysts, however, noted that the sustainability of the naira’s gains will depend on continued foreign exchange inflows, oil export earnings, import demand, external reserve levels and overall market sentiment.
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Market observers said stronger crude oil production, improved investor participation and increased foreign portfolio inflows could further support the local currency in the coming weeks.
While short-term fluctuations remain possible, the naira’s recent performance suggests a more stable foreign exchange environment compared to the volatility experienced in previous years.
The development is expected to provide some relief for businesses and manufacturers that rely on imported inputs, while also supporting broader efforts to contain inflationary pressures within the economy.
