Market News

By Grace Alegba

The Nigerian Naira capped a triumphant trading week on Friday, appreciating to N1,421.73 per U.S. dollar at the official Investors and Exporters (I&E) window, its strongest close since early February and a stark reversal from the currency’s volatility earlier this year.

The 1.07% gain or N15.23, against Tuesday’s rate of N1,436.97 extends a five-day rally that has shaved nearly 2.2% off the dollar’s value in just one week, signaling renewed investor confidence in Africa’s largest economy.

Central Bank of Nigeria (CBN) data underscores the momentum: The Naira opened Monday at N1,452.79, dipped slightly to N1,448.20 on Tuesday, and climbed to N1,444.42 by Wednesday before accelerating to Friday’s peak.

This trajectory mirrors gains in the parallel market, where the local currency traded between N1,479 and N1,490 per dollar, down from highs above N1,500 just two weeks ago.

Trading volumes surged 12% week-on-week at the official window, reflecting heightened foreign inflows and reduced dollar demand amid stabilizing global oil prices.

Economists are hailing the uptick as a “turning point” for Nigeria’s battered currency, which lost over 70% of its value against the dollar in 2024 amid fuel subsidy cuts and foreign reserve drains.

Nigeria’s delisting from the Financial Action Task Force (FATF) “grey list” on October 24, after three years of compliance hurdles on anti-money laundering, has been a game-changer, analysts say.

The move restores access to international capital markets, slashing compliance costs for banks by up to 20% and drawing in $1.2 billion in fresh FDI pledges within days.

The rally’s broader implications are profound. Inflation, which peaked at 34.2% in June, eased to 28.1% last month, buoyed by cheaper imports and a 5% drop in food prices.