The naira extended its recent gains at the official market on Thursday, strengthening to N1,385 per dollar, its strongest level since May 2024, according to data from the Central Bank of Nigeria (CBN).

Figures published on the CBN’s Nigerian Foreign Exchange Market (NFEM) platform show that the local currency appreciated further from its previous close, showing improved short-term stability at the official window after weeks of heightened volatility.

The latest performance places the naira at levels last seen in late May 2024, when reform-driven inflows and policy adjustments briefly supported the currency before renewed pressures emerged later in the year.

What the data shows

At the close of trading on Thursday, the naira exchanged at N1,385 per dollar at the NFEM, marking a further appreciation and confirming its strongest official-market showing in over 20 months.

Analysts say the continued strengthening reflects relatively improved liquidity conditions at the official window, supported by ongoing FX market reforms and tighter monitoring of transactions. The move also suggests a temporary easing of demand pressure at the NFEM.

Parallel market still mixed

Despite the improved performance at the official market, signals from the parallel market remain mixed, highlighting persistent distortions in the broader foreign exchange system.

Traders note that unmet FX demand outside official channels continues to influence pricing in the informal market, underscoring the gap between official-market stability and broader market confidence.

Factors supporting the naira

The naira’s recent appreciation is occurring against the backdrop of renewed weakness in the US dollar, which has provided some external support to emerging and frontier market currencies.

The dollar has retreated in recent weeks to its weakest levels since early 2022 as investors reassess the outlook for the US economy amid slowing growth signals and policy uncertainty.

US President Donald Trump recently dismissed concerns over the dollar’s decline, describing the currency’s position as strong despite recent market movements.

For Nigeria, the softer dollar environment has eased external pressure on the naira, particularly at the official market, where reforms aimed at improving transparency and price discovery have gradually taken effect.

Analysts at Cowry Assets in their daily market insight said, “The naira sustained its appreciation across both exchange channels on Thursday, rising 0.25% to N1,396.99/$ at the NAFEM window and strengthening 1.06% to N1,454/$ in the parallel market, reflecting improved currency sentiment across both the regulated official segment and the informal foreign exchange market.”

All share index climbs 0.22%

Meanwhile, the Nigerian Exchange ended Thursday on a bullish note, with the All-Share Index climbing 0.22% to 165,527.31 points.

Market capitalization expanded by N232.35 billion to N105.97 trillion. Market breadth was favorable at 1.5x, with 41 gainers surpassing 27 losers. RTBRISCOE, SCOA, DEAPCAP, VERITASKAP, and ZICHIS led the advancers, while HMCALL, UNIONDICON, UPL, LEGENDINT, and AUSTINLAZ suffered the steepest declines.

Sectoral performance was predominantly positive: Banking topped gains with a 0.68% rise, followed by Insurance climbing 0.64%, Consumer Goods increasing 0.46%, and Oil & Gas edging up 0.10%. Conversely, the Industrial and Commodity sectors remained unchanged.

Trading activity showed mixed results as share volume surged 10.95% to 691.42 million units, while deal count dropped 8.32% to 38,665 transactions and transaction value decreased 7.07% to ₦15.37 billion.