The Nigerian Naira has sustained its positive momentum, appreciating to N1,595 per dollar in the parallel market on Tuesday. This marks a significant improvement from N1,610 per dollar on Monday, reflecting a N45 week-on-week (WoW) gain from N1,640 per dollar recorded last Tuesday. This steady rise in value signals a period of stability for the Naira in the parallel market.
In the official Nigerian Foreign Exchange Market (NFEM), the Naira has remained stable at N1,499 per dollar. However, it has recorded a N27.3 WoW appreciation, up from N1,526.3 per dollar last Tuesday. This steady performance in both the parallel and official markets has contributed to narrowing the margin between the two rates, which now stands at N96 per dollar, a reduction from N113.7 per dollar last week.
The Naira has been on an upward trajectory since Thursday, January 23rd, when it appreciated to N1,665 per dollar in the parallel market from N1,670 per dollar the day before. On the same day, the Naira in the official market also saw a slight improvement, rising to N1,548 per dollar from N1,553 per dollar. Since that time, the Naira has gained N75 in the parallel market and N54 in the official market, marking a substantial recovery.
Currency traders have attributed the Naira’s appreciation to a combination of factors, including a reduced demand for the US dollar as a result of the Chinese New Year holiday, which has limited the need for foreign currency transactions. Additionally, there have been reports that banks are now more willing to honor customer requests for Personal Travel Allowance (PTA) and Business Travel Allowance (BTA), which were previously difficult to obtain due to forex scarcity. The improved availability of these services has contributed to the positive trend for the Naira.
These developments have led to a more favorable outlook for the Naira, with market observers cautiously optimistic about its continued strength. As the gap between the parallel market and NFEM rate narrows, there is growing hope that the Naira’s performance will remain resilient, benefiting businesses and individuals alike.