THE naira continued its recovery momentum on Thursday, strengthening against major international currencies at the official foreign exchange market, as sustained regulatory reforms and improved liquidity conditions boosted confidence in the Nigerian currency.

As of January 29, the naira touched a record high of ₦1,394 per dollar during intraday trading before closing at ₦1,396.99 at the Nigerian Foreign Exchange Market (NFEM). This represents one of the currency’s strongest performances in about 22 months and a significant turnaround from the volatility experienced in 2024.

Data released by the Central Bank of Nigeria (CBN) showed that the indicative exchange rate improved from ₦1,401.22 per dollar recorded on Wednesday to ₦1,396.99, reflecting an appreciation of about 1.26 percent in a single trading session.

Although some analysts have linked the recent gains to increased foreign currency inflows from Nigerians in the diaspora, market watchers point more strongly to the impact of sustained reforms by the CBN. These include the unification of exchange rates, improved transparency in the foreign exchange market, enhanced investor confidence, and policies aimed at attracting foreign capital and boosting FX liquidity.

The naira also recorded marginal gains at the parallel market, where it appreciated to ₦1,475 per dollar from ₦1,485 the previous day. However, the spread between the official and parallel market rates widened slightly to ₦79 per dollar, compared with ₦78.5 recorded earlier in the week.

Against other major currencies, the naira posted mixed performances. It strengthened to ₦2,010 per British pound on Thursday from ₦2,020 the previous day and appreciated to ₦1,725 per euro from ₦1,730.

However, it closed weaker against the Canadian dollar at ₦1,070 compared to ₦1,065 previously, while it remained stable against the Chinese yuan at ₦205 at the official market.

The renewed stability of the naira is widely seen as a positive signal for the economy, particularly for importers, investors, and businesses reliant on foreign exchange. Analysts believe that if current reforms and FX inflows are sustained, the naira could maintain its upward trajectory in the medium term.

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