Naira gains ground on increased dollar inflow
Agency Report
Nigeria’s foreign exchange market is witnessing a notable turnaround, with the naira appreciating steadily and forex stability returning to the parallel market, thanks to improved dollar liquidity, effective monetary reforms, and heightened security clampdowns on speculators and hoarders.
On Wednesday, July 29, the naira appreciated to N1,535/$1 at the parallel market, gaining significantly from N1,580/$1 recorded at the start of the month.
Currency traders and financial analysts have attributed this recovery to a combination of factors, particularly increased dollar supply and the Central Bank of Nigeria (CBN)’s policy effectiveness.
Licensed Bureau de Change (BDC) operators in Lagos and Abuja confirmed improved dollar supply at both the official and informal markets, with narrowing exchange rate differentials.
The convergence between the Nigerian Foreign Exchange Market (NFEM) and the parallel market is being hailed as a major win for the CBN’s exchange rate reform agenda.
President of the Association of Bureau De Change Operators of Nigeria (ABCON), highlighted that supply now outstrips demand, reversing a long-standing challenge in Nigeria’s forex market.
“The forex market is stable. Supply outstrips demand. There is policy effectiveness, fiscal discipline, and stability in commodity prices. These are all contributing to the naira’s newfound strength,” Gwadebe said.
He also praised the role of security agencies, including the EFCC and NFIU, for their coordinated actions against illegal forex activities, saying their efforts have helped to curb hoarding, speculation, and fictitious transactions that previously destabilized the market.
The CBN’s suite of reforms—ranging from exchange rate unification to monetary tightening—has attracted increased foreign capital, improved external reserves, and restored investor confidence.
One visible impact is the lifting of a three-year moratorium on naira-funded debit card usage abroad by Nigerian banks—an indication of improved dollar liquidity.
“There’s a bouquet of hard work from stakeholders, regulators, security agencies, operators, and fiscal authorities. The result is what we are seeing now—a stable and gradually appreciating naira,” Gwadebe noted.
