Naira Strengthens Against Dollar, Pound, Euro as CBN Releases Fresh Exchange Rates
- Naira appreciates slightly to N1,378/$ at the official market due to reduced dollar demand
- Parallel market sees naira weaken to N1,400/$ amid increased foreign currency needs
- Global dollar remains resilient as geopolitical tensions and oil prices support safe-haven assets
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
The Nigerian naira posted a modest gain against the US dollar at the official foreign exchange market on Thursday, as reduced demand for foreign currency and weaker trading activity helped support the local currency.
Fresh data released by the Central Bank of Nigeria (CBN) showed the naira closed at N1,378.4313/$ at the Nigerian Foreign Exchange Market (NFEM), improving slightly from N1,379.0675/$ recorded a day earlier.
Source: Getty Images
The appreciation reflects improving liquidity conditions at the official market despite the absence of fresh dollar interventions by the apex bank.
Lower dollar demand boosts the naira
Market data indicated that the naira's latest gain was largely driven by a slowdown in foreign exchange demand among banks and corporate customers.
Interbank FX turnover fell sharply to $78.71 million, representing a decline of more than 62% from the $208.09 million traded on Wednesday.
Trading activity also weakened considerably, with the number of completed transactions at the NFEM dropping to 106 deals, down from 150 deals recorded in the previous session.
Analysts said the lower trading volume suggests that pressure from dollar buyers eased, allowing the naira to recover modestly and maintain stability around the N1,378/$ level.
The market also recorded fewer customer bids as financial institutions executed fewer foreign exchange transactions during the trading session, according to a report by MarketForces Africa.
Parallel market moves in the opposite direction
While the official market recorded gains, the naira weakened slightly in the parallel market.
The local currency depreciated to N1,400 per US dollar as demand for foreign currency increased among importers, travellers and other end-users in the informal market, where dollar supply remained relatively tight.
The widening gap between the official and parallel market rates continues to reflect differences in liquidity and access to foreign exchange across both segments.
Dollar holds firm globally
Globally, the US dollar remained resilient against major currencies as investors sought safe-haven assets amid renewed geopolitical tensions in the Gulf region.
Higher crude oil prices also reinforced expectations that global interest rates could remain elevated for longer, supporting the greenback.
The dollar traded around 162.41 Japanese yen, close to its strongest level since early July, while the euro remained largely unchanged at $1.1426. The British pound also traded flat at $1.3392.
Elsewhere, the New Zealand dollar extended gains after the country's central bank maintained a hawkish monetary policy stance.
Source: Getty Images
Meanwhile, precious metals remained supported by global uncertainty.
Gold rebounded after briefly slipping below $4,022 and traded with a firmer tone near $4,118, while silver recovered toward the $59 level, reflecting continued investor demand for safe-haven assets.
Naira holds firm at N1,370/$
Legit.ng earlier reported that Nigeria's naira is maintaining its stability at N1,370.1904 per US dollar due to timely interventions by the Central Bank of Nigeria and improved liquidity in the foreign exchange market.
As global oil prices show slight resilience, market analysts warn that ongoing geopolitical tensions could still impact Nigeria's economic outlook dramatically.
Source: Legit.ng
