N1,369/$: Naira Rallies Against Dollar as Nigeria’s Reserves Climb
- Nigeria's naira appreciates to N1,369 per dollar amid rising external reserves
- Forex turnover surges over 63% as market confidence strengthens amid improved foreign inflows
- Growing external reserves reach $51.06 billion, boosting the naira's resilience against major currencies
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
Nigeria's currency recorded a modest gain against the United States dollar in the official foreign exchange market as the country's external reserves climbed to their highest level in more than a decade, boosting confidence in the nation's foreign exchange outlook.
Naira appreciates to N1,369 per dollar
The naira appreciated by about 0.10 per cent against the US dollar at the Nigerian Foreign Exchange Market (NFEM), closing at N1,369.11/$ compared to N1,370.46/$ recorded in the previous trading session.
Source: Getty Images
According to the latest daily foreign exchange update from the Central Bank of Nigeria (CBN), the local currency maintained a steady upward trend as improved dollar liquidity supported market activity.
Data showed that trades were executed within a range of N1,368 to N1,373 per dollar during the session, reflecting relatively stable demand and supply conditions in the official market.
Forex turnover jumps over 63%
Market activity also strengthened significantly, with interbank foreign exchange turnover rising sharply to $65.21 million from $39.90 million in the previous session.
The more than 63 per cent increase in trading volume points to improved liquidity and growing confidence among market participants.
Notably, the gains in the naira came despite the absence of direct intervention by the Central Bank in the forex market over the past six weeks, suggesting that market forces and stronger external fundamentals are increasingly supporting the local currency.
External reserves hit a 15-year peak
One of the biggest drivers of the naira's recent resilience is Nigeria's growing external reserves, which climbed to $51.06 billion, the highest level recorded since 2009.
The surge in reserves has been attributed to a combination of lower petroleum import bills, stronger crude oil production, and relatively favourable global oil prices over recent months.
Analysts say the larger reserve buffer gives the country more capacity to defend the naira against external shocks while improving investor confidence in Nigeria's foreign exchange market.
Oil prices retreat amid Iran deal hopes
Meanwhile, global oil prices declined on Monday after reports emerged that U.S. and Iranian officials had agreed on a framework aimed at reaching a final agreement within 60 days.
The development eased concerns over supply constraints, with the U.S. Treasury reportedly authorising the sale of Iranian oil for the next 60 days.
Source: Getty Images
As a result, international benchmark Brent crude futures for August delivery fell by more than 3 per cent to around $77 per barrel, while U.S. West Texas Intermediate crude slipped over 2 per cent to trade near $74 per barrel.
Despite the recent decline in oil prices, Nigeria's rising reserves and improved forex liquidity continue to provide crucial support for the naira, reinforcing expectations of greater stability in the foreign exchange market in the near term.
Naira gains more against USD
Legit.ng earlier reported that the recent appreciation of the naira against the US dollar was supported by a significant rise in Nigeria's external reserves.
This 13-year high of over $50 billion not only strengthens market confidence but also sets the stage for potential currency stability and reduced inflation pressures.
Source: Legit.ng
