The naira surged to a seven-month high, appreciating to N1,500 per dollar in the parallel market, driven by increased dollar supply. Meanwhile, the official exchange rate depreciated slightly to N1,504 per dollar, narrowing the gap to N4 per dollar. Experts predict continued stability if market conditions remain unchanged.
The Nigerian naira experienced a significant boost, reaching its highest level in seven months by appreciating to N1,500 per dollar in the parallel market, up from N1,530 per dollar recorded last weekend. This marks a major milestone, as the last time the naira traded below this threshold was in June 2024, when it stood at N1,495 per dollar.
However, the official exchange rate, as reported by the Central Bank of Nigeria (CBN), showed a slight depreciation, with the naira settling at N1,504 per dollar, compared to N1,502.5 per dollar previously. This shift has resulted in an unusual scenario where the parallel market rate is lower than the official exchange rate, reducing the gap between both markets to just N4 per dollar, a notable drop from N27.5 per dollar recorded last Friday.
Analysts at CardinalStone Research confirmed the development, citing a 0.67% appreciation in the parallel market. Meanwhile, traders attributed the currency’s strengthening to an increase in dollar supply, particularly through banks and Bureau de Change operators. A currency trader, Yinusa Sadiq, noted that the improved supply has made dollars more accessible, leading to further appreciation despite persistent demand.
Looking ahead, forex experts anticipate that the naira could stabilize within the N1,490 to N1,500 range if the positive supply trend continues. Market analysts at Cowry Asset Management echoed this sentiment, suggesting that the naira’s performance will depend on ongoing market conditions and foreign exchange supply dynamics.
