The naira appreciated to N1,315 per dollar at the official foreign exchange market on Thursday, September 5, recording its strongest level since April 2024, according to data from the Nigerian Foreign Exchange Market (NFEM). This marks a 0.84 per cent gain compared to the N1,326 per dollar rate recorded on September 2.
Official and Parallel Market Gains
The recovery was not limited to the official window. At the parallel market, the naira strengthened to N1,400 per dollar on Friday, improving from N1,410 per dollar the previous day. This simultaneous improvement across both segments of the market signals a broad-based strengthening of the Nigerian currency.
The last time the naira traded at the N1,300 level was in April 2024, making this a significant milestone for the currency. The appreciation comes as Nigeria's external reserves reach levels not seen in more than 17 years.
External Reserves at 17-Year High
Central Bank of Nigeria (CBN) data showed reserves stood at $54.08 billion as of Thursday, up from $45.56 billion recorded on January 2. This represents a year-to-date increase of $8.51 billion, or 18.69 per cent. The sharp growth in foreign reserves has been closely watched as a key indicator of Nigeria's external financial health.
A stronger reserve buffer gives the CBN greater capacity to intervene in the FX market and defend the naira when demand for dollars rises. This increased capacity is seen as a stabilizing factor for the currency.
Market Outlook
The naira's appreciation and the reserve build-up signal a period of relative stability for the currency, though the gap between the official and parallel market rates remains wide at roughly N85 per dollar. This persistent gap continues to be a point of focus for market observers.
According to Legit.ng journalist Victor Enengedi, who has over a decade's experience covering energy, MSMEs, technology, banking and the economy, the gains across both segments of the market come as Nigeria's external reserves reach levels not seen in more than 17 years.
