The Nigerian naira posted a modest appreciation of 0.04 per cent against the US dollar in the official Nigerian Autonomous Foreign Exchange Market (NAFEM) on Tuesday, closing at N1,447.43 per dollar compared to Monday’s rate of N1,448.03.
The local currency also strengthened against the British pound by N5.72 to settle at N1,903.51/£1, although it weakened marginally by 17 kobo against the euro to N1,679.16/€1.
In the parallel market, the naira held steady at N1,460/$1, while authorised dealers such as Guaranty Trust Bank quoted the same rate as the official window at N1,447/$1 — the narrowest gap between the two markets in recent memory.
Currency traders attributed the naira’s gentle recovery to a combination of improving fundamentals: Nigeria’s external reserves crossed $46.7 billion on Wednesday, bolstered by proceeds from a recent Eurobond issuance and sustained foreign portfolio inflows, while October headline inflation dropped sharply to 16.05 per cent, its lowest level in over two years.
Market participants said the Central Bank of Nigeria has continued to limit its direct interventions to around $50 million per session in recent weeks, allowing growing dollar supply from exporters and investors to support the currency organically.
“The naira is finally enjoying a period of relative calm,” a senior foreign-exchange dealer at a Tier-1 bank said. “With reserves at multi-year highs and inflation trending lower, the pressure that forced aggressive CBN sales earlier in the year has eased significantly.”
The improved sentiment in the currency market comes despite lingering caution in global risk assets, including cryptocurrencies, where more than $1 trillion has been erased from total market value over the past six weeks. Bitcoin traded around $90,640 on Tuesday after a 0.8 per cent daily gain, while Ethereum rose to $3,026.
Analysts expect the naira to remain supported in the near term as long as oil prices stay firm, remittance inflows hold up through the festive season, and the CBN maintains its measured approach to FX supply.
