Naira Soars to N1,436 on Broad-Based US Dollar Selloffs
Naira gained an additional upsurge advantage against the US dollar at the official currency market on Thursday as the dollar index slipped after the US Federal Reserve axed the interest rate by 25 basis points.
In 10 trading sessions, the naira has gained N39 against the US dollar at the official window in the absence of FX pressures, details from the Central Bank of Nigeria (CBN) daily FX update revealed.
The supply side has been boosted by foreign portfolio investors’ inflows, supported by contribution from the exporters, non-bank corporate and individuals.
Update FX data revealed that the naira strengthened against the dollar on Thursday, appreciating 0.52% to ₦1,436.97/$ at Nigerian foreign exchange market and 0.15% to ₦1,489/$ in the parallel market, reflecting improved demand across both segments.
Gross balance in the external reserves printed at $23.109 billion, and some investment banking have upgraded their estimate on exchange rate direction for 2025 in the light of new development in the currency market.
The naira is about by about 6% against the US dollar in 2025, according to Fitch Solution webinar on sub-Saharan African economy today. Analysts’ acknowledge the local currency will continue to gain.
But on the side, analysts weighed the impact on strong naira against Nigeria’s export competitiveness, say 2026 will be a defining year – hoping the net external balance will surfeit for the next fight.
The exchange rate has shown notable resilience and sustained improvement in recent months. After closing the first half of the year at ₦1,530/US$, the Naira has appreciated sharply since June and a year to-date (YTD) appreciation of approximately 6.1%.
In note, CSL Stockbrokers Limited said there are several downside risks that could weigh on the Naira over the coming months, potentially tempering the recent gains seen in the foreign exchange market.
“First, heightened global market volatility remains a major risk factor. Uncertainty surrounding U.S. trade policy and geopolitical tensions could trigger renewed bouts of global risk aversion, prompting investors to retreat from emerging and frontier markets in favour of safe-haven assets such as gold.
“We recall that a similar episode occurred in April, when the announcement of new US tariffs led to a sharp depreciation of the Naira to a year-low of ₦1,630/US$, as offshore investors reduced exposure to Nigerian assets. We note that a recurrence of such global shocks could once again exert downward pressure on the Naira.
“Second, if interest rates differential between Nigerian and US assets narrows by more than expected, this could reduce the attractiveness of the carry trade and potentially trigger some unwinding of existing positions.
“Such a scenario would likely amplify currency weakness, especially in an environment where domestic demand for foreign exchange remains somewhat high,” the investment firm said. #Naira Soars to N1,436 on Broad-Based US Dollar Selloffs NLNG, NCDMB launch ICT Hub to Boost Tech Skills in Nigeria
