The naira appreciated to N1,610 per US dollar in the parallel market on Monday, marking a notable gain from Friday’s closing rate of N1,630/$1, according to Naijaonpoint sources in Lagos.
This improvement comes after a turbulent performance in May, during which the currency declined by 1.24% in the parallel (black) market from the beginning of the month.
Naijaonpoint data indicated that the naira hit its lowest point at N1,635/$1 on May 15 before experiencing a slight recovery.
Between May 21 and 29, the naira traded within a relatively narrow range of N1,618/$1 to N1,625/$1, reflecting some level of stability despite the overall depreciation. At the beginning of May, the naira had traded at around N1,610/$1 before starting its downward trend.
As of the time of this report, trading in the official market was still ongoing, and Monday’s closing rate had not yet been published. However, data from the Central Bank of Nigeria (CBN) shows that the naira maintained relative stability from May 23 to May 30, fluctuating between N1,579/$1 and N1,592/$1.
This contrasts with the currency’s performance in the first week of May, when it traded between N1,607/$1 and N1,612/$1 in the official market.
According to the CBN, the naira recorded a 1.28% gain over the course of May.
In the black market, the naira also recorded strong performances against the British Pounds as it currently trades at N2175/£1 on Monday. This is against Friday’s closing rate of N2190/£1.
The naira equally showed its strength against the Euro at N1,810/€1, an increase from Friday’s N1,815/€1.
The appreciation of the currency signals less pressure on the naira in recent days as the data from the CBN shows.
While this gain is a positive sign, the parallel market remains volatile, and without sustained economic reforms and improved foreign exchange reserves, the naira’s strength could be short-lived.
Last week, global credit ratings agency Moody’s upgraded Nigeria’s sovereign rating from Caa1 to B3, highlighting substantial progress in the nation’s external and fiscal positions.
This positive revision signals growing confidence in Nigeria’s economic stability and future outlook.
“The recent overhaul of Nigeria’s foreign exchange management framework has markedly improved the balance of payments and bolstered the CBN’s (Central Bank of Nigeria) foreign exchange reserves,” the credit rating agency stated.
Several analysts suggest that a key factor influencing the decision is Nigeria’s progress in mitigating inflationary risks. While past policy changes led to inflationary pressures, recent economic strategies have helped stabilize borrowing costs and price growth.
President Bola Tinubu on Saturday stated that the improved rating validates his administration’s commitment to restoring investor confidence, unlocking economic potential, and securing long-term prosperity.
President Bola Tinubu on Saturday stated that the improved rating validates his administration’s commitment to restoring investor confidence, unlocking economic potential, and securing long-term prosperity.