The Nigerian naira gained more strength in the parallel market on Monday, trading at N1,527 per dollar. This is the best rate the local currency has achieved since late July 2025, when it last touched the N1,520 mark.
Compared to Friday’s closing price of N1,530.96/$1, the currency recorded a modest improvement, continuing a steady recovery trend that began earlier this month. Market watchers note that the appreciation signals renewed confidence in Nigeria’s currency, at least in the short term.
Data from trading sessions in the first week of September show a gradual upward shift. The naira started at N1,539/$1 on Monday, held the same rate on Tuesday, inched up to N1,538/$1 midweek, strengthened to N1,535/$1 on Thursday, and ended Friday at N1,530.96/$1. The momentum carried into the new week, bringing Monday’s performance at N1,527/$1.
On the official side, market activity was interrupted by the public holiday on Friday, September 5. However, earlier in the week, figures from the Central Bank of Nigeria (CBN) indicated similar improvements. The official rate moved from N1,525.45/$1 on Tuesday, to N1,522/$1 on Wednesday, and appreciated further to N1,511.5/$1 by Thursday. Analysts described Thursday’s rate as one of the strongest in recent weeks, narrowing the gap between the official and parallel market.
Reserves strengthen confidence
According to the CBN website, Nigeria’s external reserves rose slightly by 0.09% to $41.5 billion as of September 3. Stable reserves are considered essential for exchange rate stability, foreign investor confidence, and the country’s ability to manage imports and debt servicing. For policymakers, the current trend signals a measure of resilience despite Nigeria’s revenue pressures and debt obligations.
During the July Monetary Policy Committee (MPC) meeting, CBN Governor Olayemi Cardoso pointed out that improved foreign inflows, rising crude oil earnings, non-oil exports, and reduced import levels were supporting stability in the FX market. The unification of exchange rates and the clearing of a $7 billion forex backlog also helped restore confidence among investors.
Looking ahead: political risks
Experts caution that political activities leading to the 2027 general elections could upset the naira’s recent stability. Standard Bank, in its latest assessment, projected that higher spending and increased demand for dollars during campaign seasons in 2026 and 2027 could place additional pressure on the currency.
The bank revised its 2025 forecast, now expecting the naira to close the year at N1,585.5/$1, a milder depreciation than its earlier outlook of N1,697.5/$1. It explained that the CBN’s stronger foreign reserve position should allow it to limit sharp spikes in the dollar exchange rate.
Similarly, economist Dr. Paul Alaje of SPM Professionals warned that reckless management of foreign exchange in the run-up to the polls could damage the fragile stability that Nigeria has started to experience.
Commentary
The naira’s current performance suggests that recent reforms and tighter monetary policies are delivering some results. However, the underlying pressures—ranging from election-related spending to Nigeria’s heavy debt service—remain strong risks. If political leaders and policymakers maintain discipline, the gains seen in early September may provide a foundation for more stability in 2026. On the other hand, fiscal indiscipline could quickly reverse the fragile progress.
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For now, investors are cautiously optimistic, as both the parallel and official markets show signs of convergence. A stronger reserve position, better export earnings, and reduced imports may give Nigeria some breathing space. But as history has shown, sustained discipline will be the real test.
Tags: naira, forex, black market, CBN, FX reserves, Nigeria economy, 2027 elections