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Naira gains ground to ₦1,535/$1 amid excess dollar supply and tighter security clampdowns
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CBN’s reforms, fiscal discipline, and investor confidence seen as key to forex market stability
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Currency traders say speculation, hoarding drop sharply as naira strengthens across markets
The Nigerian naira continues its upward trajectory in the foreign exchange market, buoyed by excess dollar supply, effective Central Bank of Nigeria (CBN) policy reforms, and strong enforcement against currency speculators.
Currency traders and market analysts revealed that the improved performance of the naira—now exchanging at ₦1,535/$1 in the parallel market—has been driven by a combination of factors. These include increased forex inflows, higher investor confidence, fiscal discipline, and more aggressive security actions targeting hoarding and speculative trading.
Speaking to newsmen, the President of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadebe, confirmed that forex supply is now outpacing demand.
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He credited the naira’s strength to “CBN policy effectiveness, stoppage of ways and means, commodity price stability, and collaborative efforts from fiscal and security institutions.”
Gwadebe also highlighted the role of agencies such as the EFCC and NFIU, whose sensitisation campaigns have helped curb illicit currency trading. He noted that “investors’ confidence is rising,” and that “the naira is now seen as a stronger store of value.”
The CBN’s tightening measures and exchange rate reforms have led to more alignment between the official and parallel markets, reducing arbitrage opportunities. This convergence is helping attract capital and has improved access to forex through official channels.
Another notable development is the resumption of naira-funded debit card usage abroad, a policy reversal made possible by improved dollar liquidity in the system.
BDC operators in Lagos and Abuja confirmed that many individuals and businesses have stopped hoarding dollars. “There’s been a significant drop in speculative demand,” said Abubakar, a licensed forex dealer. “People are no longer willing to hold dollars unnecessarily.”
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A separate operator linked the naira’s surge to recent positive economic outlooks from global agencies like Fitch and Moody’s, noting that the black market is even outperforming official rates in some cases.
Beyond speculation control, the CBN’s reforms are also yielding strong investor returns. Bloomberg data shows that naira-denominated bonds gained 8.6% in July, topping the EM Local Currency Government Universal Index for 23 countries.
Meanwhile, the currency’s 30-day volatility dropped to 4.6%, down from 23% in December 2024.
This renewed confidence in the Nigerian currency comes amid broader fiscal reforms and the Tinubu administration’s bid to restore macroeconomic stability through responsible monetary policy and market discipline.
