The Nigerian naira recorded a modest recovery against the US dollar at the Nigerian Foreign Exchange Market (NFEM), as improved dollar liquidity and stronger interbank activity helped ease recent pressure on the local currency.
Naira Appreciates at Official Market
Fresh foreign exchange data released by the Central Bank of Nigeria (CBN) showed that the naira appreciated by 0.09 per cent at the official market, closing at ₦1,379.46 per dollar on Wednesday, compared to ₦1,380.70/$ recorded on Tuesday. The rebound comes after consecutive sessions of weakness that had raised concerns about sustained pressure on the domestic currency. Market watchers say the improvement reflects renewed confidence in the official FX market, supported by stronger liquidity and strategic dollar injections into the system.
Interbank Turnover Surges Above $249 Million
One of the strongest indicators of renewed market confidence was the sharp increase in NFEM interbank turnover. According to data from the apex bank, total transactions among financial institutions climbed to $249.905 million across 180 deals on Wednesday, marking a significant rise in market participation. Analysts say this surge signals improved access to dollar liquidity, especially for banks handling international payments and corporate obligations. The stronger turnover also helped tighten bid-ask spreads across foreign exchange transactions, reducing volatility and improving price discovery within the market. This suggests that supply conditions improved enough to support the naira’s rebound, even as global economic uncertainty continues to weigh on emerging market currencies.
Intraday Trading Shows Stronger Dollar Availability
Trading data from the official FX platform showed that the spot rate reached an intraday high of ₦1,386/$ and briefly touched an intraday low of ₦1,365/$ during Wednesday’s session. The temporary strengthening of the naira was largely attributed to fresh FX injections that improved supply and reduced panic demand. This development reassured importers and businesses with foreign obligations, many of whom had been facing rising settlement costs due to recent exchange rate pressures. The improved trading range also signalled that the CBN’s liquidity management strategy may be helping to stabilise short-term market sentiment.
Parallel Market Remains Stable
At the parallel market, commonly referred to as the black market, the naira traded at approximately ₦1,395 per dollar, based on market checks. The relatively narrow gap between the official and parallel market rates points to a more stable exchange environment compared to previous periods of wide divergence. Currency dealers say this stability reflects stronger confidence in the formal market and reduced speculative demand.
Rising Oil Prices Add Fresh Pressure Globally
Despite the naira’s rebound, global oil prices are creating fresh uncertainty for financial markets. Brent crude surged sharply after reports emerged that the United States is preparing for an extended blockade of Iran’s ports, a move aimed at intensifying economic pressure on the Middle Eastern nation. Brent briefly climbed to $119 per barrel on Wednesday evening, its highest level this month and a nearly 7 per cent jump in a single day. According to a report by The Wall Street Journal, US President Donald Trump has instructed aides to prepare for a prolonged blockade strategy targeting Iran’s trade routes. Higher oil prices could boost Nigeria’s FX earnings as a major crude exporter, but they may also trigger inflationary pressures globally, creating fresh challenges for policymakers.
For now, however, the naira appears to be regaining some lost ground, offering cautious optimism for businesses and investors watching the FX market closely.
