The Naira continued its upward trend, reaching its strongest level in seven months in the parallel market, where it appreciated to N1,500 per dollar from N1,530 per dollar last weekend.
The last time the Naira traded below N1,500 per dollar was on June 21, 2024, when it stood at N1,495 per dollar in the parallel market. However, despite the recent gains, the local currency depreciated slightly to N1,504 per dollar in the Nigerian Foreign Exchange Market (NFEM), according to data from the Central Bank of Nigeria (CBN).
For the first time in a long while, the parallel market rate is now lower than the official market rate, with the gap between the two narrowing to minus N4 per dollar from N27.5 per dollar recorded last week.
Factors Driving Naira’s Appreciation
Analysts at Cardinalstone Research confirmed that the FMDQ FX rate depreciated by 0.17% to N1,503.63 per dollar, while the parallel market rate appreciated by 0.67% to N1,500 per dollar.
As a result, the Naira has recorded a 9.4% Year-to-Date (YtD) appreciation in the parallel market and 2.2% YtD appreciation in the official market, improving from N1,655 per dollar and N1,538.5 per dollar, respectively, at the end of last year.
Speaking to Newsmen, currency traders attributed the Naira’s continued appreciation to an improved dollar supply in the market.
“The Naira has been appreciating since last week due to increased dollar supply, even as customer demand remains high,” said Yinusa Sadiq, a currency dealer.
Another trader, Rasaq Bello, predicted that the currency would remain stable between N1,490 and N1,500 per dollar, provided the current supply trend continues.
“If the dollar supply keeps rising, I expect the exchange rate to stabilize between N1,490 and N1,500 per dollar this week,” Bello stated.
Similarly, analysts at Cowry Asset Management Limited expect the Naira to maintain a relatively stable range, barring any significant market disruptions.
