Naira hits two-month high at N1,341.99/$ amid improved market sentiment

The naira extended its recent rally on Wednesday, closing at N1,341.99 to the dollar at the official foreign exchange market — its strongest level since February 18, 2026, when it traded at N1,340/$.

Data published by the Central Bank of Nigeria (CBN) show that the local currency has posted steady gains this week, appreciating from N1,358/$ on Monday to N1,348/$ on Tuesday before strengthening further on Wednesday.

On a week-on-week basis, the naira improved from N1,369/$ recorded on April 8, 2026, signalling renewed short-term confidence at the official window despite lingering macroeconomic headwinds.

Currency analysts say the consistent appreciation reflects improved sentiment and relative stability at the official market window after previous bouts of volatility.

“The trajectory suggests better short-term liquidity conditions and possibly improved supply at the official market,” a Lagos-based forex analyst noted, adding that the steady climb indicates reduced panic demand and calmer trading conditions.

However, market watchers caution that the gains remain fragile, particularly given persistent pressures in the broader economy.

Nigeria’s external reserves declined to $48.72 billion as of April 13, 2026, down from $49.18 billion at the start of the month. While the dip is modest, analysts say reserve levels remain a critical buffer for sustaining exchange rate stability.

The CBN had earlier projected that external reserves would rise to $51.04 billion in 2026, up from $45.01 billion in 2025, reflecting optimism about improved oil earnings and capital inflows.

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Official–Parallel Market Gap Persists

Despite gains at the official market, volatility continues in the parallel (black) market, where traders attribute fluctuations to speculation, arbitrage activities and retail-level liquidity constraints.

Forex operators say the divergence between official and parallel rates remains largely driven by limited access to foreign exchange for small businesses and individuals, alongside speculative positioning.

Experts argue that narrowing the gap will require stronger FX inflows, clearer policy direction and broader access to foreign exchange across all segments of the market.

Global Factors Offer Support

External developments have also played a role in supporting the naira’s rebound.

The U.S. dollar has remained relatively weak, hovering near recent lows amid improved investor sentiment tied to expectations of renewed diplomatic engagement between the United States and Iran. A softer dollar typically supports emerging market currencies, including the naira.

Meanwhile, geopolitical tensions around the Strait of Hormuz continue to influence global oil markets. Brent crude traded near $94.87 per barrel, while U.S. crude hovered around $91.39.

Higher oil prices can strengthen Nigeria’s external earnings as a major crude exporter, although they also carry inflationary implications through higher energy and logistics costs.

Mixed Domestic Signals

The naira’s appreciation comes against a backdrop of mixed economic indicators.

Nigeria’s headline inflation rose slightly to 15.38 per cent in March from 15.06 per cent in February, reflecting persistent price pressures. Additionally, the International Monetary Fund recently revised Nigeria’s 2026 growth forecast downward from 4.4 per cent to 4.1 per cent, citing global and domestic uncertainties.

Economists say the coming weeks will test whether the naira’s rally can be sustained. Much will depend on oil price stability, capital inflows, reserve adequacy and policy consistency from monetary authorities.

For now, the currency’s climb to a two-month high signals a temporary reprieve and renewed optimism at the official foreign exchange market.