The Nigerian Naira continued its upward trajectory in the official foreign exchange market on Tuesday, strengthening to close at N1372 against the US Dollar.
The local currency’s appreciation comes on the heels of a significant intraday rally, signaling a cooling of the intense liquidity pressures that have historically plagued the Nigerian Autonomous Foreign Exchange Market (NAFEM).
During the trading session, the official spot exchange rate demonstrated notable resilience, briefly touching an intraday low of N1360 per dollar.
The market ultimately settled at a closing rate of N1367, as the demand for greenback payments remained largely contained by an adequate supply of foreign currency.
The recent gains are being attributed to a combination of domestic policy shifts and favorable global conditions. Broadstreet analysts remain optimistic about the exchange rate outlook, pointing to a steady rise in external reserves. This buildup is largely supported by consistent receipts from hydrocarbon sales, providing the Central Bank with a sturdier cushion to manage volatility.
Furthermore, the Naira is reaping the benefits of a broader shift in international markets. The US Dollar Index has been on a downward trend for the past three to five months, losing its dominance as the sell American trade gains momentum globally.
This weakening of the greenback has provided a strategic window for the Naira to recover value, a move further bolstered by ongoing domestic FX reforms.
As liquidity pressures ease, market participants are watching closely to see if the Naira can maintain this momentum.
With the global dollar index showing continued vulnerability and Nigeria’s external buffers seeing a modest revival, the immediate horizon for the local currency appears more stable than it has in recent quarters.