The naira appreciated to N1,369 per United States dollar at the official foreign exchange market on July 1, recovering part of the losses recorded at the close of June as improved liquidity continued to support the market.
Data from the Central Bank of Nigeria (CBN) showed the local currency strengthened from N1,376/$ on June 30, extending a recovery that began after it weakened to N1,389/$ on June 24. The latest gain suggests that sustained foreign exchange supply is helping to stabilise the official market despite recent volatility.
Market activity remained robust. The preceding trading session recorded official turnover of more than $1.06 billion on the Nigerian Foreign Exchange Market (NFEM), while interbank transactions totalled $269.90 million. The sizeable volume underscores continued liquidity and reflects the ability of authorised dealers to meet demand without triggering sharp depreciation.
The recovery follows a volatile end to June, when the naira swung across several trading sessions despite healthy foreign exchange inflows. Analysts say the recent pattern indicates that while liquidity conditions have improved, the exchange rate remains sensitive to shifts in demand and broader market sentiment.
The currency’s performance has also been supported by Nigeria’s improving external position. Foreign reserves have climbed above $51 billion, their highest level since 2009, after gaining more than $1 billion in the first half of June. The stronger reserve position has enhanced the CBN’s capacity to support market liquidity and reinforce confidence in the official foreign exchange window.
External developments remain a key variable for the naira. Investors are closely monitoring United States economic data, particularly labour market indicators, for clues on the direction of U.S. monetary policy. The U.S. dollar traded largely steady ahead of the release of non-farm payroll data, while the Dollar Index eased marginally to 101.38.
Comments from U.S. Federal Reserve officials suggesting that inflationary pressures have moderated have tempered expectations of further aggressive interest rate increases, although a resilient labour market continues to support the dollar.
For Nigeria, evolving global monetary conditions and international dollar liquidity remain critical to capital flows into emerging markets. Even so, the combination of stronger reserves, sustained FX turnover and improved liquidity has provided near-term support for the naira after a turbulent close to June.