Naira climbs to N1,565.46 against dollar in two-month high

DDM News

The Nigerian naira has surged to a two-month high of N1,565.46 per dollar, signaling growing market stability in the official foreign exchange market.

Diaspora Digital Media (DDM) reports that the new high was reached on Wednesday, marking the strongest performance of the naira since April 4, 2024, when the exchange rate stood at N1,567.02, according to figures released by the Central Bank of Nigeria (CBN).

By the close of trading on Wednesday, the naira had appreciated by N13.82 against the U.S. dollar, reflecting a 0.9 percent gain from the previous official rate of N1,579.28.

In the parallel market, commonly known as the black market, the naira also saw a slight boost, appreciating by N5 to settle at N1,605 per dollar. This is an improvement from the N1,610 rate recorded earlier in the week on both Monday and Tuesday.

CBN Governor Olayemi Cardoso credited the currency’s strengthening trend to disciplined reform strategies rolled out by the apex bank over the past few months.

Cardoso emphasized that the reduced disparity between official and black market rates was one of the most remarkable developments in Nigeria’s foreign exchange environment in recent times.

He stated that sustained reforms and transparency in monetary policy had restored stability to the naira and curbed speculative activities in the FX space.

“For the first time in years, the gap between the official and parallel markets has essentially vanished, reducing arbitrage opportunities significantly,” Cardoso said.

The apex bank chief also noted that the reforms have corrected previous market distortions and helped to rebuild investor confidence in Nigeria’s financial system.

As a result, he explained, there has been an uptick in autonomous foreign exchange inflows through legitimate channels, reducing the economy’s dependence on oil receipts as the primary FX source.

Cardoso highlighted that Nigeria’s external reserves had risen to over $38 billion, providing the country with nearly 10 months’ worth of import coverage.

He said this cushion positions Nigeria to better absorb global economic shocks such as volatility in oil prices and disruptions in international markets.

Economic analysts at FSDH Merchant Bank Limited have welcomed the naira’s recent performance but urged the Central Bank to remain proactive in managing the FX landscape.

They acknowledged that the ongoing reforms were essential for shoring up investor confidence and ensuring adequate market liquidity in the medium term.

Nevertheless, the analysts cautioned that monetary policy alone would not guarantee long-term economic stability or sustainable growth.

They called for deeper structural adjustments and a coordinated approach to fiscal discipline to tackle inflation and maintain macroeconomic balance.

The latest FSDH economic outlook emphasized that Nigeria’s path to recovery lies in comprehensive economic restructuring that goes beyond foreign exchange measures.

They stressed that sectors such as agriculture, manufacturing, and infrastructure must be prioritized to diversify the economy and create resilience against external shocks.

Experts also noted that improving revenue generation, enhancing public financial management, and reducing dependence on debt financing are crucial to stabilizing Nigeria’s macroeconomic outlook.

Investors are reportedly watching Nigeria closely, with growing optimism that the FX reforms will pave the way for renewed capital inflows and foreign direct investments.

Some traders expressed confidence that if current trends continue, the naira could experience further appreciation and price stability across key sectors.

However, they cautioned that factors such as rising global inflation, interest rate adjustments in developed economies, and geopolitical uncertainties could still affect Nigeria’s currency trajectory.

As the nation continues its drive toward economic reform and diversification, the CBN’s commitment to policy clarity and consistency is expected to play a vital role.

Stakeholders have urged policymakers to maintain a balance between market liberalization and safeguarding vulnerable economic sectors.

With the naira inching closer to convergence between official and parallel markets, many see this as a milestone achievement in Nigeria’s economic reform agenda.

DDM will continue monitoring developments in the FX market and provide timely updates on Nigeria’s journey toward macroeconomic recovery.

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