LAGOS, Nigeria — The Nigerian naira remained stable on Wednesday, trading at about ₦1,460 per U.S. dollar in the official market as the Central Bank of Nigeria (CBN) continued efforts to keep the foreign exchange market steady.....KINDLY READ THE FULL STORY HERE▶

At the Investors and Exporters (I&E) window, the dollar traded between ₦1,459 and ₦1,465, according to data from Investing.com. In the parallel market, however, the naira exchanged at around ₦1,485 per dollar, highlighting a continued gap between the official and street rates.

Official Rate Stable, But Pressure Persists

Traders said dollar demand from importers and travelers remained high, but the CBN’s interventions helped prevent sharp movements in the exchange rate. The stability comes amid broader efforts by the central bank to control inflation and strengthen investor confidence.

“The market has been relatively calm this week,” said a Lagos-based currency trader. “There is still strong demand for dollars, but the central bank’s presence in the market has helped maintain balance.”

The black market rate, often seen as a reflection of dollar scarcity, has remained above ₦1,480 for several days, underscoring the challenges businesses face in accessing foreign currency through official channels.

Economic Background

Nigeria’s exchange rate has been under pressure since the government floated the naira in 2023, merging multiple exchange windows in a move aimed at attracting foreign investment and improving transparency. While the reform initially caused volatility, the currency has shown periods of stability in recent months.

The CBN recently cut its benchmark interest rate by 50 basis points to 27 percent, its first reduction in five years. The move was intended to ease borrowing costs and stimulate growth in Africa’s largest economy.

However, analysts warn that lowering interest rates could put renewed pressure on the naira if foreign investors reduce their exposure to Nigerian assets.

“Stability at the official window is a positive sign, but sustained improvement will depend on stronger dollar inflows from exports, remittances, and investments,” said an economist at a Lagos-based investment firm.

Inflation, Oil, and Dollar Supply

Nigeria’s inflation rate stood at about 20.1 percent in September, slightly lower than the previous month. Analysts attribute the slowdown partly to improved food supply and relative currency stability.

Oil prices — Nigeria’s main source of foreign exchange — have also provided some support, trading near $82 per barrel this week. Higher oil receipts could help the government build foreign reserves and supply more dollars to the market.

Still, the CBN faces a delicate balancing act between supporting the naira, managing inflation, and encouraging economic growth.

Outlook

Economists expect the naira to remain between ₦1,450 and ₦1,470 in the official window in the short term, barring major external shocks. However, persistent demand in the parallel market may continue to drive a wider gap between the two exchange rates.

“The main concern is liquidity,” said a financial analyst in Abuja. “Until the country boosts non-oil exports and increases dollar inflows, pressure on the naira will remain.”

For now, businesses and travelers are watching the market closely as the CBN works to maintain calm through its interventions and policy adjustments.

Analysts say the next major indicator will be the October inflation report and any further policy signals from the central bank. A stronger naira could help reduce import costs, while further depreciation could raise inflationary risks.

As of midweek, the message from the market is clear: the naira is holding firm — but its long-term stability still depends on sustained economic and policy reforms.