(DDM) – The Nigerian naira continued its upward movement against the United States dollar, closing stronger at the official foreign exchange window as improved liquidity met international payment demands.
Currency market data showed the naira closing at ₦1,358 to the dollar at the official window, marking its strongest level since the Central Bank of Nigeria introduced its recent foreign exchange reforms.
Traders reported that better dollar supply helped the local currency maintain its rally and meet existing foreign payment obligations.
Market participants also confirmed that the naira appreciated in the informal segment of the market.
The currency gained about 0.87 percent in the parallel market to settle around ₦1,431 per dollar.
At the official window, the naira strengthened by roughly 1.08 percent to close at about ₦1,358.28 per dollar.
Analysts linked the appreciation to increased dollar liquidity from foreign portfolio investors, exporters, and non-bank corporate entities.
They explained that these players supplied more dollars into the market, which helped ease pressure on the naira.
Financial analysts now project that the naira could record further gains in the first quarter of 2026.
Some forecasts place the exchange rate between ₦1,300 and ₦1,350 per dollar if current trends continue.
Experts anchor these projections on rising oil earnings and improved external reserves.
They also point to sustained conversion of foreign currency into naira by offshore investors seeking returns in Nigeria’s financial markets.
Import-dependent companies have started to feel the impact of the stronger currency.
Many firms now require fewer naira to settle foreign invoices and obligations.
This development has reduced cost pressures for businesses that rely heavily on imported inputs.
Manufacturing and consumer goods companies, in particular, have seen some relief on their balance sheets.
The Central Bank of Nigeria attributed the currency’s performance to increased foreign portfolio investment inflows and stronger supply at the official window.
The bank’s updates suggest that improved sentiment is building across both the regulated and parallel markets.
Investors appear to be positioning themselves for more stability in the local currency.
A stronger naira also increases the purchasing power of naira-denominated assets.
Lower import costs could gradually reduce inflationary pressures tied to foreign goods.
However, some economists urge caution despite the positive signals.
They warn that exchange rate gains can reverse if dollar inflows weaken or oil prices fall.
Others note that structural issues in Nigeria’s economy still require long-term reforms.
They argue that sustainable currency strength depends on productivity, exports, and fiscal discipline.
For now, the rally has injected a measure of optimism into the foreign exchange market.
Businesses, investors, and policymakers continue to watch the trend closely.
If momentum holds, the naira’s performance could influence investment flows and pricing across sectors.
The coming months will test whether the recent appreciation represents a short-term rebound or a more stable shift in Nigeria’s currency outlook.
