The Nigerian Naira has continued its appreciation against the US dollar in the official foreign exchange market, driven by a notable absence of significant FX pressures and strategic support from the Central Bank of Nigeria (CBN). In the shortened trading week, exchange rates improved by N33, closing at N1553 per dollar in the official window on Thursday.
This positive movement is largely attributed to increased interest from foreign portfolio investors in OMO (Open Market Operations) bill auctions and a reduction in foreign currency outflows. Analysts highlighted that the absence of large dividend repatriations by multinational companies, a situation previously exacerbated by the local currency’s devaluation, has significantly contributed to the naira’s newfound stability. “Significant FX reduction from multinational dividend repatriation and improved balance of trade has helped the naira in the recovery process,” analysts commented to the MarketForces Africa team.
Data from the CBN platform indicates that the local currency’s value against the US dollar strengthened by N12 on Thursday alone, moving from N1565.46 at the close of Wednesday’s trading session to N1553.11. The naira has shown consistent improvement over the past four days, having opened the week at N1586.15 per dollar.
On the domestic front, Nigeria’s external financial position demonstrated a modest improvement in May, primarily due to a build-up in foreign reserves. According to CBN data, Nigeria’s gross external reserves rose by 1.4% month-on-month, closing May at $38.5 billion. This accumulation reflects improved crude oil receipts, a moderated import demand, and potential inflows from multilateral sources.
However, the naira’s performance was mixed across different segments of the foreign exchange market. While the official Nigerian Autonomous Foreign Exchange Market (NAFEM) window saw the naira appreciate slightly by 0.66% month-on-month, settling at N1,586.15 per U.S. dollar—a gain supported by periodic central bank interventions and a modest improvement in FX liquidity—the parallel market told a different story. In the informal market, the currency depreciated by 1.4% to close at N1,615.00 per dollar, reflecting underlying pressure from speculative activity and persistent demand imbalances.
