The naira continued its upward movement on Wednesday, closing at N1,341.99 against the U.S. dollar at the official foreign exchange market, its strongest performance since February 18, according to Central Bank of Nigeria data.
After trading at N1,358 on Monday and improving to N1,348 on Tuesday, the most recent gain maintains a favorable streak for the local currency. The consistent appreciation shows that, notwithstanding greater economic obstacles, the market has regained short-term trust.
The News Chronicle gathered that the naira’s most recent run was aided by a more upbeat attitude at the official window, improved liquidity conditions, and a weaker U.S. dollar in international markets. Analysts add that the trend might also indicate subdued investor expectations after the last few bouts of volatility.
The naira has gained on a weekly basis from N1,369 noted earlier in April, showing a significant recovery from past lows. However, Nigeria’s external reserves fell to $48.72 billion as of April 13, down from $49.18 billion at the beginning of the month, indicating persistent pressure points.
Market watchers point out that limited retail dollar supply, arbitrage, and speculation continue to drive discrepancies between official and parallel market rates. They claim that constant policy direction and stronger foreign currency inflows will determine long-run stability.
Global developments also influenced matters. Emerging market assets saw demand increase as expectations of diplomatic development between Washington and Tehran lifted. The U.S. dollar remained weak. Also under discussion are rising crude oil prices, which have consequences for Nigeria’s revenue and inflation forecast.
Although the currency has gained ground, analysts caution that long-run stability remains at risk due to inflation trends and slower growth forecasts.
