By Ada Samson , Abuja
The Nigerian Naira strengthened to N1,514.86 per US Dollar on the official market last week, nearing a five-month high. This robust performance marks a strong start to September for the domestic currency, which closed at 1,514.86/$ on Thursday at the Nigerian Foreign Exchange Market after opening the month at N1,526.09/$.The Naira had last traded below the N1,515/$ mark on March 6, when it closed at N1,512.30/$. The positive trend was also reflected in the parallel market, where the currency appreciated to N1,538/$.Analysts attribute this sustained strength to improved liquidity and consistent dollar inflows. The Central Bank of Nigeria further bolstered the market with an intervention of approximately $15 billion. A review from AIICO Capital noted that balanced flows initially kept rates stable, with a sharp rally occurring mid-week due to offshore supply, opportunistic buying, and additional portfolio flows boosting supply.Supporting the currency’s stability, the countryโs external reserves saw a modest 0.10 per cent week-on-week increase to $41.31 billion. This buildup provides a crucial buffer against external vulnerabilities and enhances the CBN’s capacity to intervene in the foreign exchange market when necessary.The outlook for the Naira remains stable in the near term, supported by improved US dollar supply. However, analysts at Cowry Asset Management caution that pressures from speculative demand and global oil price volatility may cap further gains. The outcome of upcoming OPEC+ meetings will be a key driver for crude oil prices, ultimately influencing Nigeriaโs external earnings and FX market dynamics.
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