The naira showed resilience over the last week, recovering ground against the dollar and sinking below the N1,500 per dollar threshold for the first time in months.
The official foreign exchange window’s action emphasized a combination of policy measures, reserve enhancement, and a change in investor attitude.
Starting strong, trading grew as the local currency gained 1.4 per cent on Monday to end at N1,498.50 per dollar and continued to strengthen. Its finest showing of the week on Tuesday, at N1,484. Midweek trading showed a brief reversal as renewed dollar demand pushed the naira back to N1,498.50, but Thursday saw a little rebound with the rate settling at N1,494. Generally, the naira gained 0.3% over the course of the week, suggesting a small but constructive stability band.
The News Chronicle understands that better foreign reserves, which have surpassed $41 billion, and Nigeria’s first trade surplus in almost a decade fuel much of the backing for the naira. These changes are bolstering confidence in domestic and foreign investors as well as helping to relieve stress on the currency market. Analysts say that with inflation falling and more capital flows registered, the currency has a better basis than in prior years.
Dr. Paul Uzum of Halo Capital Management said that other world forces, including a weaker US dollar versus other significant currencies and commodities, are also contributing. He observed that greater investor behavior at home—such as converting dollar holdings into naira-denominated assets with greater yields—has enhanced dollar liquidity in the local market.
Cowry Asset Management’s Charles Abuedu said the break under N1,500 was a major psychological turning point for the market, implying that investor optimism is returning. He noted that recent interventions by the Central Bank of Nigeria, including those of around $29 million, have further supported this momentum.
Although these results are promising, experts emphasize that sustaining the recovery will need constant policy direction, greater capital inflows, and continuous reforms to increase FX stability. Still, the recent changes send a welcome message of market confidence and possible relief from imported inflation pressures.
