Naira hits four-month high at N1,518.88/$ in parallel market amid growing stability

The naira appreciated to N1,518.88 per US dollar at the parallel (black) market on Monday, marking its strongest performance since March 14, when it traded at N1,517.93/$.

The new rate reflects a 0.75% gain from N1,530.26/$ recorded on July 11, signaling a return of short-term investor confidence and relative calm in the volatile foreign exchange market.

The improvement in exchange value comes amid a period of gradual appreciation and price stability for the naira throughout July, following months of intense fluctuations.

At the official market, the currency experienced modest volatility. Between July 1 and July 3, the naira showed consistent gains — moving from N1,529.58/$ to N1,526.16/$ and N1,525.82/$, respectively.

However, it briefly reversed course, weakening slightly to N1,528.56/$ on July 4, before regaining value to close at N1,528.33/$ on July 7.

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Meanwhile, the parallel market — often used as a more accessible barometer of forex demand — showed improved strength and consistency. The naira, which held at N1,550/$ between July 11 and 14, had previously appreciated from N1,570/$ on July 1 to N1,545/$ by July 10.

The recent appreciation trend follows a key policy shift — the resumption of international transactions using naira-denominated cards by several commercial banks, a move expected to reduce pressure on the FX market and provide a buffer against further depreciation.

Analysts noted that the decision could help channel demand away from the parallel market, which often reacts sharply to sudden increases in dollar requests for overseas payments.

While Nigeria continues to grapple with inflationary pressures and foreign reserve challenges, the naira’s gradual rebound in both the official and parallel markets is seen as a positive signal for market watchers and investors.

However, analysts warn that sustained progress will depend on macroeconomic reforms, increased dollar liquidity, and fiscal discipline in the months ahead.