By Seun Ibiyemi
The naira posted a mixed performance in the foreign exchange market as traders continued to monitor liquidity conditions and dollar supply across official and parallel market segments.
At the Nigerian Autonomous Foreign Exchange Market (NAFEM), the local currency traded around N1,360 to the United States dollar in recent sessions, reflecting marginal fluctuations driven by demand and supply dynamics in the market. Recent data showed the naira closing at N1,360.07/$ after a slight depreciation from the previous trading session.
Despite the minor setback, analysts noted that the naira has remained relatively stable compared to the sharp volatility experienced in previous years, supported by improved foreign exchange reforms and stronger external reserves.
Nigeria’s gross external reserves recently surpassed the $50 billion mark, providing additional support for the local currency and boosting investor confidence.
In the parallel market, the naira traded within the N1,380-N1,385 per dollar range, indicating persistent demand for foreign currency outside the official window.
Market observers said the gap between the official and parallel market rates has narrowed considerably compared to earlier periods, suggesting gradual convergence in the country’s foreign exchange market.
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Economic analysts attributed the currency’s resilience to ongoing reforms by the Central Bank of Nigeria, increased foreign exchange inflows and growing confidence among investors.
However, they cautioned that sustained stability would depend on continued improvements in dollar liquidity, export earnings and macroeconomic fundamentals.
Market participants are expected to keep a close watch on monetary policy decisions, external reserve levels and global oil price movements, all of which remain key determinants of the naira’s performance in the coming weeks.
