The Nigerian naira continued its strong recovery against the United States dollar in the official foreign exchange market, moving closer to breaking below the N1,350/$ level as improved investor confidence and increased forex inflows boosted market sentiment.
The local currency has steadily gained in the first half of May, with trades significantly below the N1,400/$ threshold that prevailed in the market in earlier months. Experts believe the naira’s latest surge has been boosted by increased foreign exchange inflows from exporters, oil corporations, and offshore investors capitalising on appealing returns in Nigeria’s debt market.
The News Chronicle reports that the difference between the official exchange rate and the parallel market has also decreased in recent weeks, a development many businesses interpret as a good indicator for market stability. Street market rates fluctuated around N1,404/$ even as the formal market traded at roughly N1,356/$.
Financial analysts predict that the naira’s position has been strengthened by constant intervention by the Central Bank of Nigeria and more restrictive monetary policies, with some predicting the currency might test the N1,320/$ region should current momentum persist.
As investors looked for safer assets following uncertainty surrounding Middle East peace negotiations and global economic situations, the US dollar remained solid throughout the world despite heightened tensions between Iran and the United States.
