Naira appreciated further against the United States (US) dollar to close at N1,455 on Thursday, October 2, reaching its highest appreciation since the beginning of this year.
It closed on Tuesday, September 30, at ₦1,475 as there was no official trading on Wednesday, October 1, because of the public holiday to mark Nigeria’s 65th Independence Anniversary.
According to official data from the Central Bank of Nigeria (CBN), the naira traded at its highest at ₦1,468 on Thursday.
It quoted the lowest rate at ₦1,445 before settling at ₦1,455 to close the day’s trading.
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Pinnacle Daily reported that the naira broke below the ₦1,500 threshold on September 15 for the first time since early February this year, and has continued to gain strength against the US greenback.
Financial analysts say the Nigerian currency could gain slightly in the coming week, supported by central bank dollar sales and subdued foreign-currency demand.
“I expect the naira to edge stronger this week, thanks to easier funding conditions which are helping to reduce pressure on liquidity and rising reserves, giving the central bank some room to manoeuvre,” Reuters quoted one trader as saying.
CBN has noted that the external reserves are quite robust to defend against any internal or external shock to the naira.
“We expect that because inflation is decelerating, the exchange rate is stable, and the aspect of weakening the currency through imported inflation will have zero effect,” Director of the Monetary Policy Committee (MPC) Department at CBN, Victor Oboh, had said.
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The onset of the harvest season has brought some softening effect on inflation, which, of course, will mute any impact it could have on the naira.
Pinnacle Daily reports that CBN recently cut the benchmark interest rate to rein in inflation, which Oboh anticipated would not hurt the value of the naira.
“You know the rate at which we are now provides a lot of incentives for foreign inflows, both from the FPIs [foreign portfolio investments] and remittances. So, in that case, with a very good liquidity level at the foreign exchange market, we don’t expect this rate cut to affect the strength of the local currency, in this case, the naira,” he said.
In his nationwide broadcast on Wednesday to commemorate Nigeria’s 65th Independence Anniversary, President Bola Tinubu alluded to the stability in the foreign exchange (FX) market.
He attributed this to the FX unification reform that led to devaluation and volatility in the market between 2023 and 2024.
The gap between the official rate and the unofficial market, hitherto creating round-tripping, has significantly vanished, on account of the FX reforms, fresh capital and remittance inflows.
”Additionally, our currency rate against the dollar is no longer determined by fluctuations in crude oil prices,” the President added.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
