(DDM) – The Nigerian naira recorded a notable appreciation against the United States dollar at the official foreign exchange market, closing at ₦1,354 to one dollar after fresh inflows improved liquidity.
Traders attributed the gain to stronger participation from offshore investors and domestic players who supplied more foreign currency into the market.
Market data showed that the local currency strengthened without direct intervention from the Central Bank of Nigeria, signaling that supply and demand forces currently drive movements.
The naira gained about ₦11.80 during the session, reflecting what dealers described as renewed confidence among Foreign Portfolio Investors and local institutions.
Participants exchanged the currency within a band that ranged from roughly ₦1,352.50 to ₦1,360 per dollar, indicating relatively stable trading conditions.
Analysts linked the improvement to rising foreign exchange reserves, which they say now provide a buffer for the market.
Nigeria’s reserves recently stood near $46.9 billion, supported by oil receipts, diaspora remittances, and other inflow sources.
Experts noted that consistent reserve growth often reassures investors and helps authorities manage volatility.
Many economists, however, caution that short-term appreciation does not always translate into long-term stability.
They argue that structural factors such as import dependence, inflation, and production capacity still shape currency strength.
Nigeria has faced repeated currency pressures over the past decade due to fluctuating oil prices and limited non-oil exports.
The country relies heavily on crude oil earnings for foreign exchange, making the naira sensitive to global energy markets.
Reforms introduced in recent years aimed to unify exchange rates and attract foreign capital.
Those reforms initially triggered sharp depreciation but later encouraged more transparent price discovery.
Some market watchers believe the latest gains show that reforms slowly improve liquidity.
Others warn that speculative flows can reverse quickly if global conditions change.
In the broader commodities market, oil prices moved upward by more than one percent, which often benefits Nigeria as an oil exporter.
Brent crude traded near $69 per barrel, while U.S. West Texas Intermediate hovered in the mid-$60 range.
Rising oil prices typically support Nigeria’s reserves and fiscal position because they increase export revenues.
Gold prices also shifted as investors adjusted positions ahead of major U.S. economic data releases.
Global investors often move toward gold and dollars when uncertainty rises, influencing emerging market currencies like the naira.
Financial analysts say geopolitical tensions in key shipping routes also affect investor sentiment and energy prices.
They add that Nigeria’s outlook depends partly on how well it sustains inflows and manages inflation.
Inflation remains a major concern for households and businesses across the country.
A stronger currency can reduce import costs, which may ease price pressures if the trend holds.
Still, some critics question whether ordinary Nigerians will feel immediate relief.
They argue that food prices and energy costs respond slowly to currency changes.
Supporters of current policies counter that gradual stability builds the foundation for growth.
They call for deeper diversification into agriculture, manufacturing, and technology exports.
Such diversification could reduce pressure on the foreign exchange market over time.
For now, the naira’s rise has energized debate about the direction of Nigeria’s economy.
Investors will watch upcoming data and policy signals to judge whether the recovery can last.
