Nigeria’s currency posted modest gains against the US dollar after weekly foreign exchange turnover climbed to $1.98 billion, underscoring improving liquidity conditions in the country’s currency market and renewed confidence in recent monetary reforms.
The naira appreciated across segments of the foreign exchange market during the trading week, supported by stronger dollar inflows from exporters, foreign portfolio investors, and financial institutions. Analysts said the rise in market turnover signals deeper participation in the Nigerian foreign exchange market, which has faced persistent volatility over the past two years.
The higher transaction volume comes as the Central Bank of Nigeria continues efforts to stabilize the naira through policy tightening, improved transparency, and measures aimed at attracting foreign capital. Market participants noted that increased FX supply helped narrow pricing pressures and reduced speculative demand for the US dollar.
Currency dealers said turnover nearing the $2 billion mark represents one of the strongest weekly performances recorded in recent months. The development reflects growing activity within the Nigerian Autonomous Foreign Exchange Market, where exchange rates are largely determined by market forces.
Financial analysts said the naira’s recent stability could improve investor sentiment toward Nigeria’s fixed-income and equity markets, particularly as the country seeks to attract offshore capital amid elevated inflation and slowing economic growth. A stronger or more stable naira can also help moderate imported inflation, a major driver of rising consumer prices in Africa’s largest economy.
However, economists cautioned that sustaining the currency’s momentum will depend on consistent dollar inflows, stronger oil export earnings, and continued policy credibility from monetary authorities. Nigeria remains heavily reliant on crude oil exports for foreign exchange earnings, leaving the naira vulnerable to swings in global energy prices and external market shocks.
The improved turnover also coincides with tighter liquidity management by the central bank, including high interest rates designed to curb inflation and attract foreign portfolio investments into naira-denominated assets. Higher yields on government securities have recently drawn increased interest from offshore investors seeking returns in emerging markets.
Despite the currency’s gains, businesses continue to face elevated operating costs linked to inflation, energy prices, and exchange-rate uncertainty. Import-dependent sectors remain particularly exposed to fluctuations in the naira, although recent stability may ease short-term planning pressures for manufacturers and retailers.
Investors will now closely monitor upcoming inflation data, external reserves levels, and future central bank actions for signals on whether the naira can maintain its upward trajectory in the weeks ahead.
