Naira Strengthens Across Markets, Gains N11.8/$ At Official Window

The Naira recorded a modest appreciation against the United States dollar at the official foreign exchange window in April, supported by sustained interventions from the Central Bank of Nigeria.
Data from the apex bank’s daily FX publications showed that the local currency closed the month at N1,374.94 per dollar, reflecting a gain of about N11.80 compared to its opening rate of N1,386.72.
The improvement underscores continued efforts by the central bank to stabilise the foreign exchange market and enhance liquidity at the official window.
At the parallel market, the naira also strengthened, closing at N1,385 per dollar during the last trading session in April. This represents an appreciation of about N15 over the 30-day period.
Analysts note that the narrowing gap between the official and unofficial markets signals improved transparency and efficiency in Nigeria’s exchange rate system. The spread between both segments is now estimated at between two and five per cent, significantly reducing arbitrage opportunities that previously distorted the market.
The growing alignment of rates has also diminished the relevance of the black market, as confidence gradually returns to the formal foreign exchange market.
Supporting this trend, a recent report by global financial services firm Ebury indicated that daily turnover in Nigeria’s foreign exchange market has risen sharply, exceeding $500 million.
While still below the levels seen in more developed markets such as South Africa—where daily spot FX turnover ranges between $4 billion and $6 billion—the figure marks a significant improvement from approximately $60 million recorded in 2016.
Despite these gains, external pressures persist. Contrary to expectations that higher global oil prices would bolster Nigeria’s fiscal position, the country has continued to experience foreign exchange outflows.
Crude oil prices surged above $120 per barrel in April, up from around $65 before the escalation of the US-Iran conflict in February. Historically, rising oil prices have often been accompanied by a stronger US dollar, which can exacerbate inflationary pressures in import-dependent economies like Nigeria.
The sustained demand for foreign exchange has also weighed on the country’s external buffers. Nigeria’s gross external reserves declined to $48.37 billion as of April 29, down from a recent peak of $50 billion.
Market observers say the trajectory of the naira in the coming months will depend on the central bank’s ability to sustain liquidity, manage demand pressures, and navigate evolving global economic conditions.