The naira has started the month of February on a positive note, recording a strong performance against the United States dollar in the foreign exchange market.
Within one week, the local currency appreciated by about 2.5%, raising hopes of improved stability in Nigeria’s forex space.
Data from the Aboki foreign exchange platform shows that the naira strengthened from N1,421.63 per dollar at the end of last week to N1,386.55 by the close of trading this week.
This represents a gain of N35.08 and marks the naira’s best level in almost two years.
Trading activities during the week showed steady improvement in demand and supply, as the naira opened at N1,418.95 and gradually appreciated across sessions. Market watchers say the consistent upward movement reflects growing confidence among investors and better liquidity in the official market.
Friday’s trading was particularly encouraging, as the naira gained over N10 compared to the previous day. Analysts note that such movement suggests reduced pressure on the currency and improved participation by forex sellers.
The parallel market also followed the same positive direction. By the end of the week, the naira exchanged at about N1,452 per dollar, improving by roughly N18 from earlier levels. The smaller gap between the official and parallel market rates is seen as a sign that speculative activities are reducing.
One major factor supporting the naira is Nigeria’s rising external reserves, which now stand at over $46 billion. This provides the Central Bank of Nigeria with stronger capacity to intervene in the market when needed and manage sudden fluctuations.
Experts say recent reforms in the foreign exchange system, improved transparency, and attractive interest rates have helped draw foreign portfolio investors back into the market. In addition, steady inflows from Nigerians in the diaspora have continued to support dollar supply.
While the current outlook appears positive, analysts warn that Nigeria’s heavy dependence on oil exports remains a risk. Any sharp drop in global oil prices could affect forex earnings and put pressure on the naira again.
For now, traders and businesses are watching closely as February unfolds, hopeful that disciplined policies and sustained inflows will help the naira maintain its current strength.
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