The naira bounced back on Wednesday, gaining strength both in the parallel and official markets and bringing a rare sigh of relief.
Boosted by dollar supply and reform efforts, the local currency’s rise sparks cautious optimism amid lingering economic uncertainties.
Nigeria’s naira recorded notable gains on Wednesday, offering a glimmer of optimism for the local currency amid persistent volatility in the foreign exchange market. In the parallel market, the naira appreciated to ₦1,615 per US dollar, rising ₦5 from the ₦1,620 rate recorded the previous day.
The appreciation extended to the official market as well. According to figures published by the Central Bank of Nigeria (CBN), the naira strengthened to ₦1,564 per dollar in the Nigerian Foreign Exchange Market (NFEM), up from ₦1,579 on Tuesday. This ₦15 gain marks one of the most significant daily improvements in recent weeks, signaling increased dollar liquidity and easing pressure on the naira.
Despite this progress, the disparity between the official and parallel market rates widened slightly, climbing from ₦41 to ₦51. This growing spread has become a key focus for market watchers and policy analysts, as it reflects the ongoing challenges in harmonizing Nigeria’s multiple exchange rate windows.
Analysts have attributed the naira’s short-term strength to a combination of factors, including improved supply of foreign currency, possibly from increased oil revenue inflows and remittances. Some also point to growing trader confidence following recent CBN interventions aimed at improving transparency and efficiency in the forex market.
Additionally, speculation around government efforts to attract foreign direct investment and curb speculative trading has injected cautious optimism into the market. “We’re seeing an encouraging response to reforms, but the naira’s long-term health still depends on broader structural shifts in the economy,” said a Lagos-based financial analyst.
The CBN’s recent push to unify exchange rates, clear forex backlogs, and tighten money supply has been welcomed by stakeholders, but economists warn that these measures must be sustained to have a lasting impact. With inflation still hovering at elevated levels and external reserves under pressure, the road to full naira stability remains uncertain.
Nevertheless, the gains seen this week could provide temporary relief for importers and businesses grappling with high foreign exchange costs. As the government continues to roll out its economic reform agenda, all eyes will be on how consistent policies and global oil trends influence the currency’s performance.
For now, Nigerians can cautiously celebrate the naira’s rebound while hoping that it signals the start of a more stable exchange rate regime.
