The naira posted a modest appreciation at the official foreign exchange market on June 1, while rates in the parallel market remained largely stable, reflecting a period of relative calm in the country’s currency market.
Data released by the Central Bank of Nigeria (CBN) showed that the naira closed at N1,366/$1 on the Nigerian Foreign Exchange Market (NFEM), improving from N1,372/$1 recorded on May 29. The movement represents a gain of N6 or 0.44 percent against the United States dollar.
The parallel market, which often serves as a gauge of retail foreign exchange demand, remained unchanged at N1,385/$1, indicating a narrowing gap between official and informal market rates.
The stability extended to other major currencies traded in the informal market. The British pound strengthened slightly against the naira, with the exchange rate improving to N1,870/£1 from N1,875/£1 previously. Similarly, the euro traded at N1,620/€1, compared with N1,630/€1 on the previous trading day.
External Reserves Continue to Rise
Nigeria’s external reserves has continued to rise. The country’s reserves increased to $49.581 billion as of May 29, up from $49.342 billion recorded on May 26, representing a 0.48 percent increase.
The growth in reserves strengthens the CBN’s capacity to intervene in the foreign exchange market when necessary and provides additional support for Nigeria’s balance of payments position.
The latest figures suggest that ongoing reforms aimed at improving foreign exchange liquidity and attracting capital inflows may be contributing to the relative stability of the naira. However, analysts note that sustaining gains will depend on continued growth in export earnings, foreign investment inflows, and prudent monetary management.
With the gap between official and parallel market rates remaining narrow, market participants will be watching closely for signs that the recent stability can be maintained through the second half of the year.
