Naira strengthens, breaks below N1,360/$ as external reserves near $50bn

The Nigerian naira strengthened further against the United States dollar on Thursday, closing below the N1,360/$ threshold for the first time in four weeks amid rising external reserves, improved foreign exchange liquidity and sustained reforms by the Central Bank of Nigeria (CBN).

Latest data released by the Central Bank of Nigeria showed that the local currency closed at N1,359.75 per dollar on June 4, 2026, compared with N1,360.00/$ recorded in the previous trading session.

The development marks the first time the naira has traded below the N1,360/$ level since May 7, 2026, reinforcing growing confidence in the country’s foreign exchange market and signaling improving currency stability.

CBN data indicated that the naira maintained a relatively stable performance throughout Thursday’s trading session, reflecting stronger market fundamentals and a healthier balance between demand and supply in the official foreign exchange market.

During the trading session, the currency exchanged within a narrow range of N1,356.75/$ and N1,361.50/$, while the simple mean exchange rate settled at N1,359.138/$.

Interbank foreign exchange turnover reached $128.17 million, with 121 deals recorded among participating financial institutions.

Market analysts noted that the narrow trading band reflects reduced volatility and suggests growing confidence among investors and market participants.

According to financial experts, stability in exchange rate movements has become increasingly important for businesses, importers and investors seeking predictability in foreign exchange transactions.

The latest appreciation of the naira coincides with a steady increase in Nigeria’s external reserves, which have continued to strengthen in recent weeks.

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Figures released by the CBN showed that the country’s gross external reserves climbed to $49.96 billion as of June 3, 2026, placing reserves just shy of the $50 billion mark.

Economists say stronger reserve levels provide additional support for exchange rate stability by enhancing the country’s ability to meet external obligations and intervene in the foreign exchange market when necessary.

Market observers attribute much of the naira’s recent resilience to ongoing reforms introduced by the CBN to improve transparency, efficiency and governance in the foreign exchange market.

Among the most recent initiatives is the introduction of the Fourth Edition of the Foreign Exchange Manual, which contains updated operational guidelines aimed at strengthening market oversight and facilitating smoother foreign exchange transactions.

One of the key changes under the revised framework is the increase in allowable advance payment for imports from 15 percent to 30 percent.

Financial analysts also point to rising foreign exchange inflows from multiple sources as a major factor supporting the naira’s recent gains.

These include increased earnings from crude oil exports, stronger diaspora remittances and renewed interest from foreign portfolio investors attracted by Nigeria’s monetary policy stance and improved market transparency.

The combination of higher inflows and tighter market regulation has helped narrow gaps between foreign exchange demand and supply, contributing to the relative stability seen in recent months.

The naira closed May 2026 at N1,372/$ in the official market, compared with N1,585.50/$ recorded in May 2025, highlighting the currency’s recovery over the past 12 months.

The appreciation comes as the CBN continues to pursue policies aimed at improving liquidity, strengthening investor confidence and ensuring greater transparency in the foreign exchange market.