Market News

The exchange rate between the Naira and dollar strengthened to N1,394/$1 in the official market on Wednesday, marking its strongest performance since May 2024.

The data was obtained from the Central Bank of Nigeria’s (CBN) website, which tracks movements at the Nigerian Foreign Exchange Market (NFEM).

The appreciation comes after weeks of volatility in the FX market and places the naira close to levels last seen in late May 2024, raising cautious optimism among market participants even as gaps with the parallel market persist.

What the data is saying 

The naira recorded a notable gain at the official market, reflecting improving conditions at the NFEM and a temporary easing of pressure on the local currency.

Nairametrics Research data shows that the currency appreciated sharply compared to its previous close, reinforcing signs of short-term stability at the official window.

• The naira closed at N1,394 per dollar on Wednesday at the NFEM, strengthening from N1,409.5 per dollar recorded on Tuesday.
• This level represents the strongest official-market performance since May 2024, when the naira traded at N1,329.65 per dollar on May 29, 2024.
• The appreciation marks a reversal from recent volatility that had seen the currency fluctuate sharply at the official window.

Overall, the data suggest that official-market reforms and liquidity conditions are offering some near-term support to the naira, even as broader structural challenges remain unresolved.

More Insights 

Despite the gains recorded at the official market, the parallel market continues to send mixed signals about the health of Nigeria’s foreign exchange system.

• The divergence between the two markets highlights ongoing distortions, particularly around unmet FX demand outside official channels.
• At the parallel market, the naira traded at N1,490 per dollar on Wednesday, slightly firmer than the N1,491 per dollar recorded on Tuesday.
• This movement widened the gap between the official and parallel market rates to N96.

The N96 differential is the widest since February 5, 2025, when the gap peaked at N105, according to Nairametrics data.

Market activity suggests that demand pressures and speculative positioning continue to weigh more heavily on the informal market.

These trends indicate that while official-market stability is improving, confidence across the broader FX ecosystem remains uneven.

What you should know 

The naira’s recent appreciation is occurring alongside a period of global US dollar weakness, which has provided some external support to emerging and frontier market currencies.

The US dollar has retreated in recent weeks, falling to its weakest levels since early 2022 as investors reassess the outlook for the US economy.

US President Donald Trump recently dismissed concerns over the dollar’s decline during a press conference in Iowa.

“No. I think it’s great. I think the value of the dollar was great,” Trump said when asked if he was worried about the currency’s fall.

Investor concerns persist around the secondary effects of US trade policies, which have contributed to uncertainty in global financial markets and pressured the greenback.

Nairametrics reports that last week, the Naira closed the mid-week trading session at N1,423/$ at the official foreign exchange market.