Naira Posts Biggest Weekly Gain in Months, Hits N1,367 at NAFEX

The Nigerian naira recorded its strongest weekly performance in months, appreciating to N1,367.5 per dollar at the Nigerian Autonomous Foreign Exchange Market on Monday — the first time since 2024 that the official and parallel market rates have converged this closely — as higher oil prices, rising foreign exchange inflows, and ongoing Central Bank reforms lifted sentiment.

At the parallel market, the dollar exchanged for N1,390, according to traders in Lagos. Analysts told Daily Trust that the improvement was no accident.

“The currency is benefiting from a combination of factors — oil prices above $105 per barrel, stronger remittance inflows in April, and the CBN’s continued discipline on liquidity management. If these conditions hold, we could see the naira stabilise around N1,350 to N1,380 at NAFEX through Q2,” one forex analyst said.

The gains extend a trend that began in late April, when improved dollar liquidity eased pressure across Nigeria’s parallel market. PM News described the weekly movement as the naira’s most decisive rally since the initial recovery that followed the unification of exchange rates in mid-2023.

The appreciation comes against the backdrop of Nigeria’s crude oil windfall from the Middle East conflict, which pushed Bonny Light crude prices above $105 per barrel and generated additional revenue for the federation account. The CBN has also been aggressive in clearing verified FX backlogs and improving access to foreign exchange for manufacturers and importers.

However, analysts cautioned that the trajectory remains vulnerable. Nigeria’s external reserves, while recovering, are still below the levels needed to sustain long-term currency stability, and any reversal in oil prices or a resumption of FX demand pressure from the import sector could quickly reverse the gains.

For ordinary Nigerians, the naira rally offers limited immediate relief: food prices, rent, and imported goods remain elevated after two years of naira weakness, and the pass-through of exchange rate gains to retail prices typically lags by several months.

Sources: Nairametrics, Daily Trust, PM News