Nigeria’s naira strengthened against the U.S. dollar on Wednesday after the Central Bank of Nigeria resumed foreign exchange sales into the market, a move that helped steady the currency amid rising external reserves and increased foreign portfolio inflows.
The naira appreciated by N25.21 to close at N1,376.19 per dollar on March 11 at the Nigerian Foreign Exchange Market (NFEM), according to data released by the Central Bank of Nigeria. The currency had traded at about N1,401.40 earlier in the week.
Trading data published by the apex bank showed the dollar changed hands within a range of N1,373 to N1,388 during Wednesday’s session, reflecting improved liquidity in the official market following the central bank’s intervention.
The parallel market, commonly known as the black market, remained broadly stable, with dealers quoting the dollar at about N1,440.
The currency’s gains came as Nigeria’s external reserves continued to strengthen, providing the monetary authority with more room to defend the naira and supply foreign exchange to the market. Figures on the CBN’s website show reserves climbed to about $50.01 billion, later rising further to roughly $50.45 billion.
In a statement issued earlier, Central Bank Governor Olayemi Cardoso said the rise in reserves reflects stronger external fundamentals and policy reforms aimed at restoring investor confidence in Nigeria’s foreign exchange market.
“The improvement in the country’s reserve position reflects ongoing reforms and stronger inflows that are helping stabilize the foreign exchange market,” Cardoso said.
Market data indicate that the central bank sold about $314.2 million into the market during the latest intervention round, accounting for roughly 25% of total foreign exchange inflows.
A report by Coronation Merchant Bank showed total FX inflows reached about $1.26 billion during the period, with foreign portfolio investors contributing $518.7 million, representing 41.3% of the total.
The stronger inflow of foreign capital has supported Nigeria’s reserves position, which the central bank said now provides about 9.68 months of import cover, a buffer that helps shield the economy from external shocks and currency volatility.
The CBN also published updated official exchange rates for several major currencies. The euro traded at about N1,594.59, while the British pound was quoted at N1,845.47. Other rates included the Swiss franc at N1,765.48, the Chinese yuan at N200.41, the Saudi riyal at N366.72 and the UAE dirham at N374.63.
Analysts say geopolitical developments could still shape the trajectory of Nigeria’s currency and broader macroeconomic outlook.
Muda Yusuf, chief executive officer of the Centre for the Promotion of Private Enterprise (CPPE), said the escalating tensions involving Iran, the United States and Israel could produce mixed outcomes for Africa’s largest oil producer.
According to Yusuf, higher oil prices triggered by geopolitical tensions could boost Nigeria’s export earnings and fiscal revenues, potentially supporting the naira. However, global risk aversion and capital flight from emerging markets could offset those gains.
“The net effect on the exchange rate will depend on whether increased oil revenue inflows outweigh possible capital reversals from investors,” Yusuf said.
For now, stronger reserves and renewed central bank intervention appear to be providing short-term support for the naira as policymakers continue efforts to stabilize Nigeria’s foreign exchange market.