The Nigerian naira has notched another milestone in its remarkable recovery, appreciating to N1,499 per US dollar in the official foreign exchange market as of Wednesday, February 26. This marks a significant gain from its recent trends, reflecting growing confidence in the Central Bank of Nigeria’s (CBN) reforms and a bolstered supply of foreign currency in the market. The local currency’s rally, which saw a 0.16% increase from Tuesday’s rates, has ignited optimism among economists and traders alike, with many pointing to a confluence of factors driving this upward surge.
Data from the FMDQ platform, which tracks official exchange rates, confirmed the naira’s close at N1,499.08 per dollar, a notable improvement that aligns with its parallel market performance, where it traded at N1,495 on the same day. This narrowing gap between the official and black-market rates—long a point of concern for policymakers—underscores the effectiveness of recent CBN strategies under Governor Olayemi Cardoso. Currency traders attribute the appreciation to an uptick in dollar inflows, despite a reported 46% dip in foreign exchange supply, suggesting a more resilient and adaptive market.
“The naira’s strength is no fluke,” said Rasaq Bello, a Lagos-based currency dealer. “We’re seeing a steady flow of dollars from banks and exporters, even with high demand persisting. It’s a sign the system is stabilizing.” Exporters contributed 14.22% to the supply side, while other sources made up a modest 0.38%, according to market analysts. Bello projects the naira could hover between N1,490 and N1,500 in the coming weeks if supply conditions hold—a sentiment echoed by many in the trading community.
The CBN’s fingerprints are all over this turnaround. Policies such as extending dollar access to Bureau de Change (BDC) operators until May 30, 2025, and allowing banks to sell interbank proceeds have injected much-needed liquidity into the system. Aminu Gwadabe, President of the Association of Bureau de Change Operators of Nigeria (ABCON), hailed the development as “phenomenal,” crediting the apex bank’s “transformative leadership” for restoring faith in the naira. “This isn’t just about numbers—it’s about trust returning to the market,” he told reporters.
The naira’s ascent comes amidst broader economic undertones. Rising crude oil production—now averaging over 1.55 million barrels per day—has bolstered foreign reserves, providing a buffer for the currency. Increased inflows from foreign portfolio investors, drawn by the naira’s perceived undervaluation, have further fueled this rally. Analysts at CardinalStone Research noted a year-to-date appreciation of 9.4% in the parallel market and 2.2% in the official window since the close of 2024, when rates stood at N1,655 and N1,538.50 per dollar, respectively.
Yet, challenges linger. Inflationary pressures remain a thorn in Nigeria’s side, with experts cautioning that sustained naira appreciation is crucial to easing the cost of living. The 46% decline in FX inflows reported this week raises questions about long-term supply sustainability. Still, the mood is cautiously optimistic. “If oil output and investor confidence hold steady, we could see the naira test even lower levels,” said Jimi Ogbobine, head of Agusto Consulting. “But it’s a delicate balance.”
For everyday Nigerians, the naira’s rise offers a glimmer of relief after years of depreciation that eroded purchasing power. Market vendors in Lagos reported cautious hope, though commodity prices have yet to reflect the currency’s gains fully. “It’s good news, but we need to see it in our pockets,” said Funmi Adebayo, a trader at Oshodi Market.
As the naira basks in its strongest showing in seven months, the spotlight remains on the CBN and fiscal authorities to maintain this momentum. With global oil prices climbing amid shipping route tensions, Nigeria stands at a pivotal juncture. For now, the naira’s climb to N1,499 is more than a statistic—it’s a symbol of resilience and a hint of brighter days ahead.
