The naira appreciated to N1,349.5 per US dollar in the official foreign exchange market on Tuesday. This marks the first time it has traded below the N1,350/$ threshold since May 29, 2024.
Data from the official market shows the currency improved from Monday’s rate of N1,354.9 per dollar. The appreciation reflects sustained gains in the official market. Supported by rising external reserves and anticipation ahead of the Central Bank of Nigeria’s (CBN) upcoming Monetary Policy Committee (MPC) meeting.
However, the parallel market rate remained weaker, closing at N1,443.68 per dollar on Tuesday, compared to N1,443.40 on Monday. This highlights ongoing pressure in the unofficial segment of the foreign exchange market.
The development underscores efforts to stabilize the naira and narrow the gap between official and parallel market rates.
Key Data Highlights
- The naira closed at N1,349.5 per dollar in the official market on Tuesday. Strengthening from N1,354.9 per dollar recorded the previous day.
- This is the first time the currency has traded below N1,350/$ since May 29, 2024. When it quoted at N1,329.65 per dollar.
- The parallel market rate stood at N1,443.68 per dollar on Tuesday, slightly weaker than the official rate.
Improved foreign exchange liquidity in the official market, supported by rising reserves, has contributed to the naira’s appreciation.
Expert Insights
Analysts attribute the naira’s recent gains to stronger foreign exchange inflows and improved market confidence.
Dr. Joseph Mbada, an economist based in Abuja, explained that the naira’s strengthening below N1,350/$ reflects better liquidity in the official market. He stated:
“The improves supply conditions in the official window drives by higher inflows and tighter monetary policies, which helped curb speculative demand. Increased liquidity has eased volatility and supported price stability.”
Key factors driving the naira’s appreciation include:
- Higher oil export earnings boosting external reserves.
- Increased remittance inflows and portfolio investments improving dollar supply.
- A narrowing gap between official and parallel market rates, signaling better market alignment.
Experts also note that stronger reserves provide the CBN with additional tools to manage volatility and defend the naira when needed.
What to Expect
The exchange rate movement comes ahead of the CBN’s 304th Monetary Policy Committee meeting, scheduled for February 23–24, 2026. Policymakers expects to review inflation trends, liquidity conditions, and foreign exchange market developments.
