Key points:
Official CBN Rate: ₦1,347.78 / USD (Monday's close)
Black-Market Rate: Trading at approx. 3.2% premium above the official rate
Drivers: Steep year-to-date appreciation (+6.9%) driven by improved official market liquidity; CBN's new policy allowing licensed BDCs to access FX (up to $150,000 weekly per BDC); Strong foreign portfolio investment (FPI) inflows estimated at $12-14 billion.
Top Tools: CBN Forex Portal, Aboki Fx
The Naira has reached one of its strongest levels in two years, trading at ₦1,347.78/$1, driven by improved liquidity and significant foreign portfolio inflows. The parallel market premium has narrowed to approximately 3.2% following CBN interventions and new BDC access rules, though analysts warn that continued gains could trigger foreign investor profit-taking.
FAQ
- What's the gap between CBN & black-market rates? The parallel market premium has narrowed significantly to around 3.2%, down from 5.7%. This compression reflects improved liquidity in the official window and CBN's strategic interventions, including the new BDC FX access policy that could inject up to $50 million monthly into the retail segment
- Will the naira strengthen further? The outlook is mixed. While current gains are strong, analysts warn that continued appreciation to ₦1,200-₦1,250/$1 could trigger foreign portfolio exits, as investors who entered at higher rates (around ₦1,500/$) would realize significant currency gains. Forward markets suggest potential weakness later in the year, with six-month non-deliverable forwards projecting ₦1,449.96/$.
- How do oil prices affect rates? While not directly cited for this move, the CBN's ability to maintain liquidity and attract $12-14 billion in FPI inflows is underpinned by Nigeria's compelling carry trade,one of the strongest in emerging markets. The central bank's focus on managing election-related liquidity risks (₦44.2 trillion expected in 2026) will be crucial for maintaining stability.
