Naira Strengthens to N1570.14 Against the Dollar

The Nigerian Naira showed significant strength against the US dollar during Friday’s trading session. According to FMDQ data, the Naira appreciated to N1570.14/$, an improvement from N1586.1/$ recorded on Thursday. This represents a notable N16 gain against the US dollar compared to the previous day’s rate in Nigeria’s FX Market.

On the black market, the Naira also saw an increase in value, rising from N1620/$ to N1615/$ on Friday. The Central Bank of Nigeria (CBN) has ramped up efforts this month to reduce the volatility of the Naira’s exchange rate.

These measures, coupled with the US dollar index hitting new lows this year due to a more dovish Fed statement, have contributed to the Naira’s gradual strengthening against the dollar.

The Naira began its upward trend after hitting a low of N1,912/$ in late February. It fell below N1,000/$ in April and is now hovering around N1,585/$. Despite the current gains, a recent survey conducted by the CBN reveals that Nigerian businesses expect the Naira to weaken further before seeing a more robust recovery in late 2024 or early 2025.

The CBN Business Expectations Survey, which involved over 1,600 Nigerian businesses, indicated that while there is concern about the Naira’s immediate future, the majority of businesses remain optimistic.

The survey also noted that despite the CBN injecting millions into the forex market, many businesses still anticipate the Naira to weaken in July and August, as well as over the next three months.

While the Naira has shown strength against the dollar in recent sessions, the outlook for the currency remains mixed, with expectations of both short-term challenges and long-term resilience.