The naira maintained relative stability in the foreign exchange market, supported by the Central Bank of Nigeria’s (CBN) tight monetary policy, stronger crude oil production and improved foreign exchange inflows, according to market analysts.
Analysts said the CBN’s hawkish monetary stance has continued to attract foreign portfolio investments, helping to strengthen liquidity in the official foreign exchange market and reduce exchange rate volatility.
The improved performance of the local currency has also been linked to increased crude oil output and stronger export earnings, which have boosted Nigeria’s foreign exchange reserves and enhanced confidence in the economy.
Market data showed that the naira has traded within a relatively narrow range in recent sessions, reflecting greater stability compared with the sharp fluctuations experienced in previous years. The CBN’s interventions, combined with improved dollar supply, have helped cushion pressure from foreign exchange demand.
Economic analysts noted that Nigeria’s improving external reserves and current account position have further strengthened the country’s ability to defend the local currency. They added that higher oil production and sustained earnings from crude and refined petroleum exports are expected to continue supporting the foreign exchange market in the coming months.
Despite the positive outlook, experts cautioned that the naira’s stability will depend on the continuation of prudent monetary policies, sustained foreign exchange inflows and favourable global oil market conditions. External risks, including fluctuations in crude oil prices and changes in global investor sentiment, could still pose challenges to the foreign exchange market.
They also observed that while inflationary pressures have moderated, the CBN is expected to maintain its tight policy stance until there is stronger evidence of sustained price stability, a move seen as critical to preserving investor confidence and supporting the naira.
