Nigeria’s currency, the naira, has strengthened to its highest level since May 2024, trading at ₦1,394 per dollar at the official Nigerian Foreign Exchange Market. The development marks a notable shift in recent currency performance and reflects a combination of Central Bank of Nigeria reforms, improved market liquidity, and broader global currency movements.

Data from the official market shows the naira gaining ground after months of volatility, supported by reforms introduced by the CBN aimed at restoring confidence and transparency in the foreign exchange system. Analysts say the improvement is partly linked to policy measures such as the clearance of outstanding dollar backlogs, increased FX supply, and the rollout of an electronic matching system that has reduced speculative pricing.

The electronic trading platform allows buyers and sellers to match bids more transparently, limiting arbitrage and price manipulation. This change has been widely cited by financial observers as a major step toward stabilising the official market and rebuilding trust among investors and market participants.

Despite the gains at the official window, the parallel market continues to trade at higher levels, with rates ranging between ₦1,468 and ₦1,480 per dollar. However, the gap between the official and parallel markets has narrowed significantly compared to previous months, a development analysts say signals reduced pressure on the naira.

Currency traders note that narrowing spreads often indicate improving confidence in official pricing mechanisms and lower speculative demand. The recent appreciation has also coincided with a broader global weakening of the US dollar, which has provided emerging market currencies with temporary relief.

Still, market watchers caution that sustained stability will depend on continued FX inflows, disciplined fiscal management, and consistent monetary policy implementation.

The Central Bank of Nigeria has implemented a series of reforms since 2024 to address longstanding challenges in the foreign exchange market. These include clearing FX backlogs owed to foreign investors and airlines, boosting supply through improved oil revenue remittances, and enforcing stricter compliance in the FX trading process.

Supporters of the reforms argue that the naira’s recent performance shows early signs of effectiveness. Some economic analysts say the appreciation reflects a market gradually adjusting to policy clarity after years of uncertainty.

Government supporters have also linked the currency improvement to the broader economic reform agenda under President Bola Ahmed Tinubu, who has prioritised market liberalisation, subsidy reforms, and revenue mobilisation as part of efforts to stabilise the economy.

Despite the positive headline numbers, skepticism remains among sections of the public and economic commentators. Critics argue that the naira’s gains are influenced more by external factors such as the weakening US dollar than by domestic productivity or export growth.

Many Nigerians also say the improved exchange rate has yet to translate into meaningful relief from high living costs. Prices of food, transportation, and household essentials remain elevated, with inflation continuing to strain purchasing power.

Economists note that exchange rate appreciation alone does not immediately reduce inflation, especially in an import-dependent economy. Structural issues such as supply chain inefficiencies, energy costs, and insecurity continue to impact prices regardless of short-term currency movements.