Naira halts depreciation against US dollar at official market

The naira closed at N1,364.83/$1 at the official foreign exchange market on Monday, August 4, gaining N3.39 against the US dollar. The gain, which is 0.25%, came after the naira ended Friday at N1,368.22/$1.

Trading activity jumped sharply, with total dollar turnover at the official market climbing more than 132% from $58.99 million to $137.05 million in a single session. The number of completed interbank deals at the Nigerian Foreign Exchange Market (NFEM) window rose to 138 from 67, signalling stronger participation by authorised dealers.

Mixed show against other currencies

The naira did not hold its ground across all currencies. It lost 10 kobo against the British pound, settling at N1,837.89 compared with N1,837.79 previously. It also shed six kobo against the euro to close at N1,573.93, down from N1,573.87 in the prior session.

In the parallel market, the naira traded at N1,405 per dollar, unchanged from Friday. The GTBank forex counter quoted N1,374 per dollar, also unchanged.

Trader links gains to CBN action and oil inflows

Lagos-based foreign exchange trader Abdullahi Aliyu said the naira's resilience reflects a combination of Central Bank of Nigeria (CBN) market support, better crude oil production figures, and favourable global oil prices. He said these factors have helped lift dollar inflows from Nigeria's oil exports.

Aliyu said: "The CBN has been active in supplying dollars into the market. Also, improved crude oil production and supportive international oil prices have boosted FX inflows from oil exports."

He cautioned that the market's direction in the months ahead would depend on whether those inflows remain strong enough to satisfy demand, particularly during the typically high-pressure final quarter of the year. Market analysts also pointed to the CBN's tight monetary policy stance as a key factor drawing foreign portfolio investors into naira-denominated assets.

Official rates across major currencies

The official market snapshot for Monday showed: CFA N2.39, Chinese Yuan/Renminbi N202.11, Danish Krona N210.53, Euro N1,573.93, Japanese Yen N8.70, Saudi Riyal N363.38, South African Rand N82.70, Special Drawing Rights (SDR) N1,864.77, Swiss Franc N1,686.86, Pounds Sterling N1,837.89, US Dollar N1,364.83, West African Unit of Account (WAUA) N1,865.14, and UAE Dirham N371.60.

Separately, Nigeria's external reserves have climbed to approximately $48.5 billion, the highest level in more than a decade. The reserves have increased by about $2.94 billion since the start of the year, rising from $45.56 billion on January 1. That represents year-to-date growth of 6.45%, pointing to improved external liquidity and stronger reserve buffers.

For the naira, the immediate pressure has eased, but the coming months will test whether improved dollar inflows can keep up with demand, especially as importers and businesses ramp up activity in the final quarter.