Dollar Falls to N1,484 in Official Window, Naira Appreciates in Parallel Market
- The Nigerian currency has continued to power ahead following an improvement in foreign exchange supplies
- The naira rose to an eight-month high in the official window on Tuesday, September 16, 2025
- Currency traders and experts have speculated that the naira will hit about N1,400 per dollar before the end of the year
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Pascal Oparada, a reporter for Legit.ng, has over ten years of experience covering technology, energy, stocks, investment, and the economy.
The naira extended its winning streak this week, appreciating to ₦1,484 per dollar at the Nigerian Foreign Exchange Market (NFEM).
According to data released by the Central Bank of Nigeria (CBN), the local currency traded as strong as ₦1,479 per dollar intraday before closing at ₦1,485.
Source: Getty Images
This marks its best performance in eight months and signals renewed investor confidence in Nigeria’s exchange rate management.
FX liquidity and rising reserves drive rally
The currency’s rally has been fueled by improved dollar liquidity in the official market and a steady increase in the nation’s foreign reserves.
Latest CBN figures show reserves rising to $41.844 billion this week from $41.698 billion last Friday.
Analysts believe the inflows reflect stronger oil receipts, portfolio investments, and a tightening of speculative activities in the parallel market.
“The upward momentum in reserves is supporting naira stability and giving the market confidence that the central bank can meet demand,” said one Lagos-based currency trader.
“What we are looking at in the near future is the dollar at N1,400 per dollar. This is because a combination of factors are driving the surge,” Janet Ogocgukwu, senior banker and economist, told Legit.ng on a call.
She disclosed that the current rate is favourable to both importers and other FX users, stating that the only losers are speculators and hoarders.
Global dollar weakness provides extra push
Beyond domestic factors, broader global dynamics are working in the naira’s favour.
The U.S. dollar index has been under pressure due to policy uncertainties and weaker economic data from the United States.
This decline has boosted emerging market currencies, with the naira among the key beneficiaries.
Inflation outlook and economic impact
Market watchers are optimistic that naira stability could help tame inflation, which has been a major economic challenge.
A stronger naira reduces the cost of imports, eases pressure on food prices, and improves purchasing power.
Analysts say if the trend continues, Nigeria could see a gradual moderation in inflation figures over the coming months, which would further ease the burden on households and businesses.
“The market is now pricing in a more stable naira in the near term, which should feed into improved inflation expectations,” said an analyst with a Lagos-based research firm.
Oil market rally lends support
Nigeria’s currency gains are also indirectly supported by a rally in crude oil prices, triggered by renewed geopolitical tensions in the Russia–Ukraine war.
Light crude futures broke through a key 200-day moving average at $63.32, sparking fresh buying interest.
Prices have since surged above $64 and are testing resistance at $64.25, with bullish targets set at $65.41 and $66.03.
Source: Getty Images
As crude accounts for more than 80% of Nigeria’s foreign exchange earnings, stronger oil prices bolster government revenues, boost reserves, and provide greater stability for the naira.
What’s ahead for the naira?
While the naira’s recovery has been celebrated, analysts caution that sustained stability will require consistent FX inflows, credible monetary policy, and reforms that encourage investor confidence.
For now, the rally is offering a rare window of relief to businesses and households weary of currency volatility, with hopes that Nigeria may finally be entering a new phase of exchange rate stability.
Naira surges on CBN’s $29m intervention
Legit.ng earlier reported that the combination of foreign exchange inflows and interventions by the Central Bank of Nigeria (CBN) in the official market has continued to boost the naira’s performance against the US dollar.
The optimism that the local currency will break the N1,500 mark is becoming probable, according to trading data.
Source: Legit.ng
