JUST IN: The Naira appreciated to N1, 560 per dollar in the parallel market

The Nigerian naira has appreciated to ₦1,560 per dollar in the parallel market, marking a gain against the U.S. dollar. This development comes amid ongoing fluctuations in the foreign exchange market as the Central Bank of Nigeria (CBN) continues its efforts to stabilize the currency.

The improvement in the naira’s value follows recent policy measures aimed at increasing dollar liquidity and curbing speculative activities in the forex market. Over the past few months, the naira has experienced volatility, with rates reaching as high as ₦1,900 per dollar before showing signs of recovery. The latest appreciation suggests a shift in market sentiment, possibly driven by an increase in foreign exchange inflows and reduced demand for the dollar.

Market analysts attribute the naira’s recent gains to interventions by the CBN, including the clearance of outstanding forex backlogs and enforcement of new forex policies. Additionally, an increase in dollar supply from exporters and remittances has contributed to the strengthening of the local currency. Some financial experts also believe that reduced speculation in the parallel market has played a role in stabilizing the exchange rate.

Despite the gains in the parallel market, the official exchange rate remains a key focus. The naira has also shown signs of improvement in the Nigerian Foreign Exchange Market (NAFEM), where the CBN has continued to implement reforms aimed at ensuring a more transparent and efficient market. The central bank’s measures include the unification of exchange rates and improved access to foreign currency for businesses and individuals.

Traders in the parallel market report that demand for the dollar has declined slightly, contributing to the naira’s appreciation. The recent positive movement in the exchange rate has also led to cautious optimism among businesses and investors, who have been closely monitoring the currency’s performance. However, concerns remain over the long-term stability of the naira, given ongoing economic challenges such as inflation, external debt, and global economic conditions.

Economic analysts caution that while the recent appreciation is a positive sign, sustaining the naira’s stability will require consistent policy implementation, increased foreign direct investment, and improvements in Nigeria’s overall economic environment. Some experts warn that external factors, including fluctuations in global oil prices and geopolitical developments, could still impact the naira’s performance in the coming months.

The CBN has reiterated its commitment to stabilizing the forex market and ensuring that businesses and individuals have better access to foreign exchange. The bank has encouraged legitimate forex transactions through official channels and has warned against speculative activities that could create unnecessary volatility in the market.

As the naira continues to recover, market participants are closely watching upcoming policy announcements and macroeconomic indicators that could influence the exchange rate further. While the currency’s appreciation to ₦1,560 per dollar is a positive development, economic stakeholders emphasize the need for sustained efforts to maintain stability and boost investor confidence in Nigeria’s financial markets.