The naira continued its rally on Thursday, reaching ₦1,385 per US dollar.
Meanwhile, the global weakness in the US dollar lifted emerging market currencies like the naira.
The Central Bank of Nigeria reported that traders pushed the currency higher in the official foreign exchange market.
Naira Rallies On Dollar Weakness
Earlier, the naira climbed to ₦1,367/$ before dropping slightly to ₦1,400.
By the close, it settled near ₦1,385, up from ₦1,394 on Wednesday.
This trend shows that increased dollar supply reduced pressure on the naira.
Global Factors Support Gains
Globally, investors reacted to soft inflation data from Japan and other economies, weakening the US dollar.
Additionally, optimism that the US could avoid a government shutdown lowered safe-haven demand.
Read Also: Naira Hits N1,394/$1, Strongest Level Since May 2024
Furthermore, speculation about a new Federal Reserve chair influenced currency markets worldwide.
Although the dollar recovered slightly later, emerging market currencies, including the naira, benefited from its overall weakness.
Domestic Reforms Boost Momentum
Domestically, reforms strengthened the naira’s performance.
Higher inflows from exports, remittances, and investments improved dollar availability.
Also, rising external reserves gave the Central Bank a stronger hand to stabilise the currency.
Moreover, the Electronic Foreign Exchange Matching System improved transparency and narrowed the gap between official and informal rates.
Analysts warn that sustaining the naira’s gains depends on broader economic conditions.
Oil prices remain a critical source of foreign exchange for Nigeria.
Therefore, continued inflows from trade, remittances, and investments are essential to maintain momentum.
Meanwhile, in parallel and bureau de change markets, the naira is also showing gradual improvement.
