Naira Strengthens Against Dollar As CBN Reforms Take Hold

The naira posted its strongest gain in nine months on Tuesday, closing at ₦1,420 to the dollar at the official Nigerian Autonomous Foreign Exchange (NAFEM) window as Central Bank reforms continued to ease pressure on the parallel market.

At the parallel market the local unit traded at ₦1,460, narrowing the official–parallel premium to just over 2 per cent — its tightest in two years.

What's Driving The Rally

Currency analysts attribute the rebound to a combination of factors:

1. Record monthly diaspora remittance inflows of $2.3 billion.
2. Aggressive treasury bill auctions yielding above 19 per cent.
3. Resumption of dollar sales to Bureau de Change operators.
4. Crude oil hovering above the $85/bbl benchmark.

"The fundamentals are aligning," said Bismarck Rewane of Financial Derivatives Company. "The next test is sustainability through Q2."

Equities responded enthusiastically, with the Nigerian Exchange All-Share Index climbing 1.8 per cent intraday and breaching the 110,000 mark for the first time. Banking stocks led gains amid expectations of stronger dollar-denominated earnings.

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