The Nigerian naira gained ground in the foreign exchange market as sustained growth in external reserves continued to boost investor and market confidence, easing concerns over prolonged dollar shortages.
Market watchers and analysts have expressed optimism that the Central Bank of Nigeria (CBN) will maintain its firm stance on defending the naira through the end of the year. The steady accumulation of foreign reserves, coupled with the absence of capital restrictions, has fueled stronger sentiment in support of the local currency.
Currency trading, however, remains subject to volatility, reflecting the daily balance between foreign exchange demand and the dollar supply in circulation. Despite fluctuations, experts believe the naira is likely to maintain the trading range recorded in the third quarter, with a potential for appreciation in the fourth quarter.
Nigeria’s external position has been buoyed by rising oil output, leading to higher foreign exchange inflows from crude oil sales. Nevertheless, a considerable portion of these revenues has been committed under oil-for-loan agreements facilitated by the Nigerian National Petroleum Company Limited (NNPC).
Fresh figures from the CBN revealed that the naira advanced against the U.S. dollar, appreciating by 0.08% to close at ₦1,487.37/$1. At the official market window, the currency traded as high as ₦1,495 per dollar, while the lowest transaction rate stood at ₦1,482.33. Similarly, at the parallel market, the naira recorded a 0.08% gain to close at an average of ₦1,516 per dollar.
On the reserves front, Nigeria’s gross external reserves inched up to $42.032 billion on Monday from $42.036 billion, supported by steady inflows from multiple sources that continue to strengthen the nation’s financial buffers.
