Naira Strengthens Against Dollar in Parallel, Official Markets

The Nigerian naira saw significant gains against the US dollar on Monday, both in the parallel and official foreign exchange (FX) markets. In the parallel market, the naira appreciated to N1,490 per dollar, marking a 1.34 percent increase from the N1,510 per dollar rate recorded on May 17.

Currency traders in Lagos, known as bureau de change (BDC) operators, reported the buying rate of the dollar at N1,450 and the selling price at N1,490, resulting in a profit margin of N40.

In the official FX market, the naira also strengthened, rising by 1.93 percent to N1,468.99 per dollar on Monday, up from N1,497.33 per dollar on May 17. During intra-day trading, the naira fluctuated, reaching as low as N1,550 per dollar and appreciating to as high as N1,400 per dollar.

On the same day, Agora Policy, a think tank based in Abuja, emphasized the need for Nigeria to establish a temporary dollar liquidity bridge or secure FX inflows to support the Central Bank of Nigeria’s (CBN) orthodox reforms. The think tank recommended measures such as eurobond issuance, asset sales, and engagement with multilateral agencies to enhance dollar inflows.

Looking ahead, Agora Policy advised that Nigeria should focus on restoring organic dollar flows from oil exports by addressing the backlog of encumbrances. Additionally, it highlighted the importance of balancing monetary policy between maintaining exchange rate stability, crucial for near-term inflation control, and enhancing the competitiveness of non-mineral exports in Nigeria’s open economy.