The naira sustained its rally on Wednesday, closing at N1,500.91 to the United States dollar at the official Nigerian Foreign Exchange Market. The performance marked a significant milestone as the local currency traded below the N1,500/$ threshold for the second consecutive day.
According to data from the Central Bank of Nigeria, the naira fluctuated between N1,498/$ and N1,507/$ during the trading session. This marked a continuation of the positive trajectory seen since the beginning of September, when the naira opened at N1,526.09/$ at the NFEM. By Monday, it had firmed to N1,506/$, maintaining that rate on Tuesday before further appreciating midweek.
The last time the naira traded at N1,500/$ was March 5, 2025, underscoring the significance of the latest development in stabilizing the currency. The parallel market mirrored the trend, as the naira appreciated to between N1,515/$ and N1,517/$ on Wednesday, strengthening from N1,525/$ the previous day.
Analysts attributed the rally to a combination of stronger naira demand, reduced speculative trading, and improved foreign reserves. They expressed optimism that the positive sentiment in the currency market would be sustained in the near term, supported by increasing external buffers.
Nigeria’s external reserves stood at $41.59bn as of Tuesday, a $25m increase from the previous day. The reserves have consistently grown in recent weeks, reflecting a healthier external position for the country.
In its Macros and Market Insight report released on Wednesday, Meristem Research underscored the role of the rising reserves in supporting the naira’s rebound. The firm noted that the domestic economy recorded relative stability in August, buoyed by moderating inflation, increased crude oil production, and a sharp rise in capital inflows.
“These factors boosted the country’s foreign exchange reserves by the end of the month, helping to sustain stability in the naira,” the report said. “We see the strengthened reserve position as a key economic milestone, as it reflects robust external buffers and enhances the Central Bank of Nigeria’s ability to sustain exchange rate stability.”
