Market News

The naira maintained a relatively stable performance at the official foreign exchange window this week, supported by improved external reserves, steady oil production, and cautious monetary policy signals from the Central Bank of Nigeria (CBN).

At the start of trading on Monday, the local currency opened at approximately N1,356.74 per Dollar, reflecting a modest recovery following the volatility recorded in mid-March. During that period, the exchange rate fluctuated between N1,344 and N1,370, underscoring persistent but manageable pressures in the foreign exchange market.

Data from the Nigerian Foreign Exchange Market (NFEM) indicated that while the naira experienced intraday highs of about N1,362.00 in recent sessions, closing rates have largely hovered around the N1,355 level. This suggests a degree of equilibrium returning to the market, as demand and supply dynamics gradually align.

Analysts attribute the relative stability of the Naira to improvements in Nigeria’s broader m a c r o e c o n o m i c environment. Chief among these is the strengthening of the country’s external reserves, which have provided a buffer against external shocks and bolstered confidence in the foreign exchange market.

Nigeria’s external reserves recently hovered around the $50 billion mark, supported by steady crude oil production estimated at 1.46 million barrels per day and relatively favourable global oil prices. The sustained inflow of oil revenues has enhanced foreign exchange liquidity, helping to stabilise the Naira in recent weeks. In addition to external sector improvements, recent policy signals from the CBN have reinforced investor confidence.

The Monetary Policy Committee (MPC) has maintained a cautious stance, opting to keep interest rates elevated in a bid to curb inflationary pressures and stabilise the economy. Inflation, which has been a key concern for policymakers, showed signs of easing earlier in the year, moderating slightly to 15.10 per cent.

The decision to sustain tight monetary conditions is seen as part of a broader effort to anchor inflation expectations and support the local currency. Market sentiment has also been buoyed by developments in the banking sector. Investors responded positively after the CBN confirmed that 30 major banks met the new capital requirements ahead of the March 31 deadline.