Naira Rises to Highest Level in 10 Months As Dollar Exchange Rate Crashes
- Naira's value has appreciated to the highest level in 10months, following a rise in foreign inflow into Nigeria
- New data shows that the CBN's external reserves have crossed $43 billion, and there is renewed economic confidence
- Aliko Dangote has also advised Nigerians holding dollars to sell, as the naira’s strong performance continues
Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The naira rose to a 10-month high in the official foreign exchange market on Wednesday, October 29.
Data from the Nigerian Foreign Exchange Market (NFEM) showed the Nigerian currency appreciated to N1,444.42 per dollar on Wednesday.
Source: Getty Images
The latest exchange rate is N3.97 or 0.27% stronger than the closing rate on Tuesday’s which was N1,448.32/$1 and also the highest since December 2024.
Naira's rally was witnessed across other market segments, with the naira trading at N1,465/$1 on the parallel market, up N10 from the previous session.
At GTBank, it strengthened by N8 to close at N1,454/$1.
The strong performance of the naira as investors continued offloading dollar holdings in favour of naira-denominated assets, buoyed by improved market liquidity and renewed confidence in the economy.
The naira also gained against major currencies, appreciating by N10.36 against the pound sterling to N1,919.09/£1, and by N4.26 against the euro to N1,681.16/€1.
Why naira is on the rise?
Analysts attributed the sustained appreciation to rising foreign exchange inflows, noting that the Financial Action Task Force’s (FATF) decision to remove Nigeria from its grey list has also provided a major boost to higher oil revenues and increased diaspora remittances.
In recent weeks, foreign direct investment inflows reportedly surged by $272.6 million, while the country’s external reserves crossed the $43 billion threshold for the first time this year.
Aliko Dangote has advised Nigerian dollar holders to sell their US dollars immediately rather than keep them.
Source: Getty Images
According to Dangote, his refinery operation and also expected supportive government polices in the months ahead will see the dollar value drop further.
He said:
“If I had dollars today, I would rather sell them now than wait for the next month or so.
Similarly, Aminu Gwadabe, President of the Association of Bureau De Change Operators of Nigeria (ABCON), as quoted by the News Agency of Nigeria (NAN) said:
“The sustained stability has reduced speculation. Speculators’ activities have been rendered ineffective in the market."
Oil market boosts outlook
Earlier, Legit.ng reported that the naira’s rally coincides with a surge in global oil prices.
Brent crude rose by over 7% within a week, driven by fresh U.S. sanctions targeting major Russian producers Rosneft and Lukoil, which account for roughly 5% of global supply.
As oil prices surge and investor confidence strengthens, analysts believe conditions may finally be turning in favour of Nigeria’s economic recovery.
Proofreading by James Ojo, copy editor at Legit.ng.
Source: Legit.ng
