Naira strengthens ahead of Sallah, hits N1,605/$1 in parallel market

The Nigerian naira continued its upward trajectory on Thursday, appreciating to N1,605 per U.S. dollar in the parallel market, up from N1,610/$1 on Wednesday, marking its second gain in four days amid rising investor optimism and festive-season cash demand.

Market data indicates that the local currency opened the week on Monday at N1,610/$1, before strengthening to N1,607/$1 on Tuesday, temporarily stabilizing midweek and now rallying again ahead of the Eid-ul-Adha holidays, officially declared for Friday, June 6, and Monday, June 9, 2025.

In the official market, the naira also showed consistent strength. According to figures from the Central Bank of Nigeria (CBN), the naira closed at ₦1,564/$1 on Wednesday, gaining against the greenback from N1,579/$1 on Tuesday and N1,580/$1 on Monday.

Although Thursday’s official closing data was yet to be released as of press time, market watchers expect the positive trend to persist, citing holiday-related demand and improved foreign exchange inflows.

The naira also showed a mixed but generally positive performance against the British Pound and Euro in the parallel market:

Against the British Pound, the naira started the week at N2,175/£1, improved to N2,165/£1 on Tuesday, briefly weakened to ₦2,210/£1 on Wednesday, but rebounded to N2,160/£1 on Thursday.

Against the Euro, the naira remained stable at N1,810/€1 on Monday and Tuesday, dipped slightly to N1,815/€1 on Wednesday, before appreciating to N1,805/€1 on Thursday.

This trend reflects renewed confidence in the local currency and suggests that speculative pressures may be easing, at least in the short term.

Analysts attribute the naira’s current resilience to several interlocking factors, including increased foreign portfolio inflows, especially as investor sentiment improves around Nigeria’s economic reform agenda.

Surging naira demand linked to the Eid-ul-Adha holidays, as consumers convert foreign currency holdings into local currency to meet spending needs. Improved foreign exchange supply from both official sources and autonomous channels.

Tighter regulatory controls, including the recent recapitalization deadline for Bureau De Change (BDC) operators, which lapsed on Tuesday, June 3, 2025, aiming to sanitize and stabilize the FX market.

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In April 2025, the naira had weakened to ₦1,600.50/$1 in the official market, highlighting persistent FX pressures ahead of the Easter holiday. However, the currency has since staged a notable recovery.

Financial analysts say the naira’s recovery, while encouraging, must be supported by sustained policy consistency, stronger capital inflows, and robust external reserves.

“The appreciation trend is promising,” said one Lagos-based FX analyst, “but it hinges on continuous reforms, monetary stability, and ensuring that dollar supply remains steady beyond seasonal surges.”

There are also early signs of convergence between the parallel and official exchange rates, a development seen as positive for Nigeria’s currency unification strategy and for restoring long-term macroeconomic confidence.