Naira rallies as strong FX liquidity lifts official market

By Reporter

The naira strengthened against the United States dollar at the official foreign exchange market on Wednesday, appreciating by N7 to close at N1,369/$, as improved liquidity and robust trading activity continued to support the local currency.

Data published by the Central Bank of Nigeria (CBN) showed the naira appreciated from N1,376/$ recorded on June 30, reversing part of the losses suffered in the closing days of last month. The recovery comes after the currency weakened to N1,389/$ on June 24 before staging a gradual rebound in subsequent trading sessions.

The latest Nigerian Foreign Exchange Market (NFEM) figures showed the naira traded within a range of N1,368/$ and N1,378.50/$, with the weighted average exchange rate settling at N1,372.41/$.

Interbank foreign exchange turnover stood at $90.30 million, while no NFEM turnover had been recorded for the July 1 trading session as of the time this report was filed. However, the previous trading day recorded significantly stronger activity, with official market turnover reaching $1.067 billion, alongside $269.90 million in interbank transactions.

The sustained high turnover suggests that dollar liquidity in the official market remains relatively strong despite recent fluctuations in the exchange rate.

The naira experienced a volatile end to June, closing at N1,376/$ on June 30 after trading at N1,385/$ on June 29, N1,384/$ on June 26 and N1,383/$ on June 25. Earlier in the week, it had weakened to N1,389/$ before recovering to N1,373/$ on June 23 and N1,369/$ on June 22.

Analysts say the recent improvement reflects continued foreign exchange inflows into the official market, helping to stabilise the local currency even as demand for dollars remains elevated.

The naira’s performance also comes against the backdrop of improving external buffers. Nigeria’s foreign exchange reserves recently climbed above $51 billion, their highest level since 2009, after increasing by more than $1 billion in the first half of June, supported by stronger foreign currency inflows.

Globally, investors remained focused on expectations for U.S. monetary policy ahead of key labour market data. The U.S. Dollar Index eased slightly to 101.38 as markets assessed signals from Federal Reserve officials suggesting inflationary pressures had moderated, even as the U.S. labour market remained resilient.

Analysts note that global interest rate expectations and international dollar liquidity continue to shape capital flows into emerging markets such as Nigeria, making external developments an important factor in the naira’s near-term outlook.

The local currency ended June 2026 at N1,376/$ in the official market, but its rebound at the start of July suggests improving liquidity may be helping to steady the exchange rate after weeks of volatility.