The Nigerian naira on Monday appreciated against the United States dollar, trading below the N1,500/$ threshold for the first time in over six months. Data from the Central Bank of Nigeria showed that the domestic currency closed at N1,497.46/$, compared to its previous close of N1,501.49/$, marking a 0.27 per cent gain.

The last time the naira traded below the N1,500/$ level in the official market was between February 24 and March 4, 2025. The recovery comes after a week in which the naira repeatedly tested the N1,500/$ mark, posting its lowest intra-day rates just above that threshold.

The positive momentum was also mirrored in the parallel market, where the naira strengthened by 0.33 per cent to settle at N1,535/$, according to data from CardinalStone Research.

Market reports indicated that the naira gained 0.98 per cent week-on-week to close at N1,501.50/$ in the official window, while the parallel market firmed by 0.33 per cent to N1,535/$.

According to the Coronation Weekly Update, the official exchange rate ended the week at a ₦35.50 or 2.23 per cent premium to the parallel market rate, suggesting a narrowing gap between both markets.

The update also showed that total foreign exchange inflows into Nigeria rose to $550.90 million last week, slightly lower than the $567.20 million recorded in the previous week.

Foreign Portfolio Investments (FPIs) dominated the inflows, accounting for $303.8 million or 55.15 per cent. Exporters contributed 17.61 per cent, non-bank corporates 17.57 per cent, other corporates 4.32 per cent, Foreign Direct Investments 3.39 per cent, the CBN 2.36 per cent, and individuals 0.60 per cent.

Analysts say the currency’s appreciation has been largely supported by strong foreign portfolio inflows, healthy external reserves, and continued policy interventions by the CBN.

AIICO Capital noted that ample dollar liquidity from FPIs, oil exporters, and offshore flows underpinned an offered market tone throughout last week.

“The FX market is expected to maintain its current stability, supported by the CBN’s continued policy adjustments and fiscal efforts to ensure adequate liquidity,” AIICO analysts said.

Similarly, Cowry Asset Management Limited said the naira’s recovery is being driven by steady dollar inflows, CBN interventions, and stronger reserves. However, it warned that renewed speculative activity could still trigger volatility.

“We expect the naira to maintain its current trend of appreciation, supported by steady dollar inflows, CBN interventions, and stronger external reserves. However, renewed speculative activity could spark volatility,” the firm stated.

Experts project that the naira will likely trade within a narrow band in the short term. Coronation analysts highlighted that the stability could be sustained by steady inflows and healthy reserves but cautioned that pressures may re-emerge if portfolio flows moderate or if foreign exchange demand surges ahead of the year-end festive season.

In the past week, Nigeria’s gross external reserves rose to $41.69 billion as of Friday, reflecting consistent daily accretions. This upward trend in reserves is expected to further boost market confidence and support the CBN’s efforts to stabilise the naira.

Despite these gains, analysts warn that the sustainability of the recovery depends on structural reforms, diversification of FX sources, and policies that attract more durable foreign direct investments rather than short-term portfolio flows.

For now, the naira’s return below ₦1,500/$ signals improved market confidence, but the weeks ahead will determine if the domestic currency can sustain its resilience against external pressures and speculative tendencies.