Financial analysts point to improving liquidity conditions and proactive market interventions as the primary stabilization drivers curbing wild fluctuations in demand pressures.

Official Window (NFEM) Performance

Data from the Central Bank of Nigeria’s (CBN) official Nigerian Foreign Exchange Market (NFEM) showed the local currency trading tightly around ₦1,361/$.

• Spot Rate: The latest official rate published by the apex bank was pegged at approximately ₦1,361.05/$.
• Weekly Trading Band: Market activity throughout the week showed low volatility, with the currency hovering within a narrow band of ₦1,359 to ₦1,365.

The modest strengthening observed in early June highlights an improved supply of foreign currency, backed by sustained liquidity-enhancing measures implemented by monetary authorities.

Parallel Market Conditions and the Convergence Spread

In the alternative parallel market (informal window), transactions remained orderly, reflecting a calmer sentiment among currency traders.

• Selling Rates: The USD exchanged between ₦1,393 and ₦1,405/$, depending on location and volume.
• Buying Rates: Bids from currency dealers generally hovered between ₦1,380 and ₦1,395/$.

A critical takeaway for the macroeconomic landscape is the ongoing narrowing of the arbitrage spread (the gap between official and parallel market rates).

Compared to the volatile premiums recorded in previous months, this alignment indicates greater transparency, a reduction in speculative trading, and a more efficient price discovery mechanism within the foreign exchange market.

While current liquidity buffers have cushioned the local currency, macroeconomic analysts note that the naira’s short-to-medium-term stability remains heavily reliant on three key pillars: The steady rise of foreign portfolio inflows, robust crude oil export revenues to maintain external reserves, and consistently predictable monetary policies from the Central Bank.

Data from the Nigerian Foreign Exchange Market (NFEM) showed the naira trading at approximately ₦1,375/$ at the official market, largely unchanged from the previous trading session. In the parallel market, the dollar exchanged between ₦1,395 and ₦1,400, maintaining a narrow spread with the official rate.

The relative stability comes at a time when businesses across Nigeria’s technology, manufacturing, and digital services sectors continue to monitor foreign exchange movements closely due to their impact on software subscriptions, cloud infrastructure costs, equipment imports, and cross-border payments.

Market analysts attribute the naira’s recent performance to improved dollar liquidity and tighter monetary policies, which have helped reduce volatility compared to previous periods of sharp currency fluctuations.

For Nigeria’s digital economy, exchange-rate stability remains a critical factor. Technology startups, fintech companies, and enterprises that rely on foreign-denominated services such as cloud computing, cybersecurity platforms, software licensing, and international payment processing often face rising operating costs whenever the naira weakens significantly.

Industry stakeholders note that a more predictable foreign exchange environment can support business planning, encourage investment, and improve confidence among both local and international investors.

While the current stability has been welcomed by businesses, analysts caution that pressure from import demand and external market developments could continue to influence currency movements in the months ahead.

The NFEM remains Nigeria’s benchmark foreign exchange market, where rates are determined through a volume-weighted average mechanism and serve as the official reference rate for the economy.

Latest data from the Central Bank of Nigeria showed that the naira depreciated to about ₦1,373.70/$ compared to ₦1,371.04/$ recorded in the previous trading session.

The development reflects ongoing volatility within Nigeria’s foreign exchange market despite recent monetary reforms and efforts by the Central Bank of Nigeria to stabilise the currency.

Market data indicated that the Nigerian Foreign Exchange Market (NFEM) recorded intraday trading movements between approximately ₦1,370/$ and ₦1,374/$ during Monday’s trading session.

At the parallel market, also known as the black market, the dollar traded around ₦1,395 buying rate and ₦1,405 selling rate in major trading hubs including Lagos and Abuja.

Financial analysts attribute the continued pressure on the naira to sustained demand for foreign exchange, import-related pressures, global economic uncertainties, and tight dollar liquidity conditions.

The depreciation comes despite broader reforms introduced by the CBN under the leadership of Olayemi Cardoso aimed at improving transparency, liquidity, and investor confidence within the FX market.

Economic experts say maintaining exchange rate stability remains critical for controlling inflation, reducing import costs, and improving business confidence in Africa’s largest economy.

The latest movement in the currency market also comes amid renewed global concerns over rising oil prices, elevated U.S. bond yields, and tightening global financial conditions, factors that continue to pressure emerging market currencies.

Despite the recent volatility, analysts note that Nigeria’s external reserves have shown signs of improvement in recent weeks, which may provide some support for FX market interventions and broader macroeconomic stability efforts.

Currency traders and investors are expected to continue monitoring CBN policy direction, foreign portfolio inflows, crude oil earnings, and external reserve performance, as key indicators influencing the naira’s trajectory in the coming months.

The naira began the week on a positive note, closing at N1,499/$1 on Monday, slightly stronger than N1,500/$1 recorded the previous business day.

However, this momentum was short-lived, as the currency weakened from Tuesday onward, closing the week at N1,542/$1, a 2.8% decline from last week’s close of N1,500/$1.

Intraday trading saw the naira reach a high of N1,615/$1 and a low of N1,505.75/$1 in the official market.

The naira performed even worse in the parallel market, closing at N1,560/$1, a 4.34% decline from its opening price of N1,495/$1 at the start of the week.

Similarly, the naira fell 3.2% against the pound sterling, depreciating from N1,870/£1 on Thursday to N1,930/£1 on Friday, a 3.76% drop for the week.

While the naira managed to hold its ground against the euro at N1,580/€1 on Friday, it still recorded a 3.94% decline for the week.

Businesses and consumers are at the receiving end of the fluctuating exchange rate. Importers of essential goods face rising costs, pushing up retail prices, while manufacturers struggle with dollar-denominated expenses.

Experts attribute the naira’s depreciation to dollar shortages and speculative activities, with additional concerns over CBN’s intervention strategies and Nigeria’s external reserves.

He made this statement during his presentation of the N47.9 trillion budget proposal to a joint session of the National Assembly on Tuesday.

Additionally, the President noted that the exchange rate is expected to improve from approximately N1,700 per dollar to N1,500.

“The Budget projects inflation will decline from the current rate of 34.6% to 15% next year while the exchange rate will improve from approximately N1,700 per dollar to N1,500 and base crude oil production assumption of say 2.06 and 2.5 million barrels per day,” Tinubu said.

He said the budget projections are based upon observations such as reduction of petroleum products importation, increased export of finished petroleum products, bumper harvest driven by enhanced security, and reducing reliance on food imports, among others.

Tinubu listed highlights of the budget to include defence and security – N4.91tn, infrastructure – N4.06tn, health – N2.4tn, and education – N3.5tn, among others.

Nigerians are grappling with economic hardship following the incessant increase in inflation and the volatile exchange rate that has seen the dollar exchange as high as N1,700 in recent days.

On Monday, the National Bureau of Statistics (NBS) said Nigeria’s headline inflation rate rose to 34.60% in November 2024 from 33.88% in October 2024.

The November inflation rate showed an increase of 0.72% points compared to the October 2024 inflation rate, according to NBS’s latest Consumer Price Index (CPI) report which measures the rate of change in prices of goods and services.

“On a year-on-year basis, the Headline inflation rate was 6.40% points higher than the rate recorded in November 2023 (28.20%). This shows that the Headline inflation rate (year-on-year basis) increased in November 2024 compared to the same month in the preceding year (i.e., November 2023),” the Bureau said.

Significantly, food inflation rate in November 2024 was 39.93% on a year-on-year basis, 7.08% points higher than the rate recorded in November 2023 (32.84%).

A Bureau De Change operator, disclosed this to our correspondent that Naira dropped to N1,420 per dollar from N1,290 in less than 48 hours at the parallel market.

“The Naira depreciated to N1,420 per dollar on Sunday at the parallel market due to high demand. We buy at N1,410 per dollar and sell at N1420 as of Sunday. It was N1290 per dollar on Friday,”

According to Analyst, CBN’s intervention was the reason for the appreciation of the currency from March to mid-April 2024.

Earlier, the Naira appreciated at both the official and parallel foreign exchange markets on Friday.

The Nigerian currency has continued to experience fluctuations in foreign exchange despite the Central Bank of Nigeria’s interventions.

For instance, from March 26th to April 26th, 2024, the apex bank released FX thrice to Bureau De Change operators.

The new rate represents a 9.8 per cent increase when compared to N1,400 to a dollar it traded at the close of trading activity on Friday, Techeconomy can report.

Recall that the Central Bank of Nigeria (CBN), last week resumed the sales of dollars to Bureau De Change operators (BDCs).

According to the circular referenced TEM/FEM/PUB/001/013 signed by Dr. Hassan Mahmud, the CBN’S Director of Trade and Exchange Department and uploaded on its website on Tuesday 23, April, 2024.

The apex bank then said it would sell $10,000 to BDCs at N1,021 per dollar and directed the operators to sell at a spread not more than 1.5 per cent above the CBN rate.

Earlier, the apex bank sold $10,000 to BDCs at a rate of N1101/$ and directed the BDCs to sell to eligible customers at a rate not exceeding 1.5 per cent above the purchase price.

The current rate is 7.27 per cent less than the previous price. This current release is hoped to further strengthen the local currency.

EFCC Arrests Alleged Currency Speculators

Similarly, operatives of the Economic and Financial Crimes Commission (EFCC) attached to the Taskforce on Currency mutilation, Dollarization of the Economy and Forex Malpractice, have arrested 34 alleged currency speculators for alleged foreign exchange fraud.

According to a statement put up on its verified X handle, the alleged currency speculators were arrested on Friday, April 26, 2024 in a sting operation following credible intelligence about illegal sales of dollars at the Wuse Zone 4 area of the Federal Capital Territory Abuja.

“Their arrest came on the heels of the EFCC’s consistent efforts to sanitise and stabilise the foreign exchange market.

“They will soon be arraigned in court upon conclusion of investigations”, EFCC said.

Well, the United States’ dollar is generally seen as the strongest currency in the world. It’s the most-traded currency on the global stage by a wide margin.

Surprisingly, the greenback is not the strongest of the 180-odd traditional fiat currencies recognized as legal tender worldwide. A fiat currency is money that has a value not tied to a physical commodity like gold or silver.

Other currencies are stronger because they’re worth more than a dollar.  Thus the following currency presented in the piece are the 10 strongest currencies in the world, based on their relative value against the U.S. dollar.

1. Kuwaiti Dinar (KWD)

The Kuwaiti dinar is the strongest currency in the world, with 1 dinar buying 3.26 dollars (or, put another way, $1 equals 0.31 Kuwaiti dinar).

Kuwait is located on the Persian Gulf between Saudi Arabia and Iraq, and the country earns much of its wealth as a leading global exporter of oil. The Kuwaiti dinar was introduced in the 1960s and was initially pegged to the British pound before being re-pegged to an undisclosed basket of currencies.

2. Bahraini Dinar (BHD)

The Bahraini dinar is the second-strongest currency in the world, with 1 dinar buying 2.65 dollars (or $1 equals 0.38 Bahraini dinar).

Bahrain is an island nation in the Persian Gulf off the eastern coast of Saudi Arabia. Like Kuwait, the country earns much of its wealth from oil and gas exports. The Bahraini dinar entered circulation in 1965 and is pegged to the dollar.

3. Omani Rial (OMR)

The Omani rial is the third-strongest currency in the world, with 1 rial buying 2.60 dollars (or $1 equals 0.38 Omani rial).

Oman sits between the United Arab Emirates and Yemen at the eastern tip of the Arabian Peninsula. As with its wealthy neighbors, Oman is a major exporter of oil and gas. The Omani rial was introduced in the 1970s and is pegged to the dollar.

4. Jordanian Dinar (JOD)

The Jordanian dinar is the fourth-strongest currency in the world, with 1 dinar buying 1.41 dollars (or $1 equals 0.71 Jordanian dinar).

Jordan is a largely landlocked country in the Middle East that is less dependent on oil and gas exports than other nations in the region. It has struggled with sluggish economic growth and rising debt. The Jordanian dinar entered circulation in 1950 and is pegged to the dollar.

5. British Pound (GBP)

The British pound is the fifth-strongest currency in the world, with 1 pound buying 1.22 dollars (or $1 equals 0.82 British pound).

Britain’s economy is the world’s sixth largest by gross domestic product (GDP), according to the World Bank. The pound was first introduced in the 1400s before being decimalized in 1971. It is free-floating, not pegged to other currencies.

6. (tie) Cayman Islands Dollar (KYD)

The Cayman Islands dollar is in a tie for sixth among the strongest currencies in the world, with 1 Cayman dollar buying 1.20 dollars (or $1 equals 0.83 Cayman Islands dollar).

The Caymans are a British territory in the Caribbean and are an offshore financial center. The Cayman Islands dollar was first introduced in the 1970s and is pegged to the dollar.

7. Gibraltar Pound (GIP)

The Gibraltar pound shares the No. 7 spot among the world’s strongest currencies, with 1 pound buying 1.22 dollars (or $1 equals 0.82 Gibraltar pound).

Gibraltar occupies just 2.6 square miles at the southern tip of Spain and is officially a British territory. The Gibraltar pound was first introduced in the 1920s and is pegged to the British pound (at par, meaning one GIP equals one GBP).

8. Swiss Franc (CHF)

The Swiss franc is tied for eighth among the strongest currencies in the world, with 1 franc buying 1.08 dollars (or $1 equals 0.92 Swiss franc).

The Swiss franc is the official legal tender of Switzerland and its tiny neighbor Liechtenstein, and the currency is seen as a safe haven due to Switzerland’s political stability. The Swiss franc was introduced in 1850 and was later briefly pegged to the euro before moving to a free-float.

9. Euro (EUR)

The euro shares the No. 8 spot among the world’s strongest currencies, with 1 euro buying 1.08 dollars (or $1 equals 0.93 euro).

The euro is the official currency of 20 out of the 27 countries that form the European Union. Euro coins and bank notes entered circulation in 2002, and the currency is free-floating.

10. U.S. Dollar (USD)

The U.S. dollar is the 10th-strongest currency in the world, with 1 dollar buying 1 dollar. (Obviously.) All other units of currency across the globe are worth less than a buck.

Created in the 1700s, the dollar is legal tender in the U.S.; its territories, including Puerto Rico; and other sovereign nations, such as Ecuador and Zimbabwe.

The U.S. is the world’s largest economy by GDP, and the dollar is easily the most-traded currency globally. And it’s widely circulated, with people in the U.S. sending tens of billions of dollars abroad to relatives and friends each year.

The dollar also is the largest reserve currency in the world—that is, the currency most held by central banks—and is the currency used to price many commodities, including oil, gold and copper.

This was as traders predicted the dollar’s fall to below N1,000 before the end of the week.

At the official foreign exchange market, data from the FMDQ Exchange, a platform that oversees the Nigerian Autonomous Foreign Exchange Market, revealed that the naira surged by 6.1 per cent or N69 from N1,205/$ recorded on Friday to N1,136/$ on Monday.

The total daily turnover dropped slightly to $251.60m on Monday, from $281.34m recorded on Friday.

The intra-day high also improved significantly, closing at N1,227 per dollar from N1,265 per dollar quoted on Friday.

The intra-day low appreciated by N100/$1 as the dollar was quoted on the spot at N1,000 on Monday, stronger than the N1,100 quoted on Friday.

The improved rate followed a string of foreign exchange directives by the Central Bank of Nigeria aimed at stabilising the naira.

The apex bank last month said it had successfully resolved all valid foreign exchange backlogs, as pledged by Olayemi Cardoso, the CBN governor, addressing inherited claims amounting to $7bn.

Data from the FMDQ also indicated that total inflows into the NAFEM increased by 41.7 per cent to $3.75bn as against $2.64bn in February – the highest level since March 2019 ($6.07bn).

The apex Bank had last week reviewed the exchange rate for the Bureau De Charge operators to N1,101 per dollar from N1,251/$1 as it plans to sell $15.88m to 1,588 eligible BDC operators.

As part of measures to control inflation and stabilise the naira, the CBN last month raised its benchmark interest rate, known as the Monetary Policy Rate by 200 basis points to 24.75 per cent from 22.75 per cent in February 2024.

“We anticipate that the naira would continue to strengthen as the CBN intensifies efforts to bolster liquidity in the market,” analysts at Afrinvest said.

Last week, an investment company, Goldman Sachs Group, said the Naira had already established itself as the top-performing currency globally in April, adding that the local currency was expected to extend its gains, amid the continuing effective policy management by the Central Bank of Nigeria.

Goldman Sachs economists, who previously forecasted in February that the Naira would strengthen to N1,200/$ in 2024, now anticipate it could surpass this level due to aggressive measures by the central bank, including a total of 600 basis points in interest rate increases during policy meetings in February and March.

This indicates an increase of N30.81 at the close of trading activity.

According to data from FMDQ Securities, the indicative exchange rate for the Nigerian Autonomous Foreign Exchange Market closing below the N1,300 ceiling marks the first instance since January 26 of this year.

The naira depreciated to as low as N1,615/$1 on March 13, 2024.

Since the introduction of a slew of forex policies by the central bank, the naira has gained over 21 per cent on the dollar since March.

Liquidity in the forex market has been attributed to an array of policies currently implemented by the CBN.

Key reforms include the unification of exchange rate windows, liberalisation of the FX market, clearance of FX backlog obligations for banks and airlines, implementation of a Price Verification System, imposition of limits on banks’ Net Open Position, removal of the daily cap of N2bn on remunerable Standing Deposit Facility, and overhaul of the Bureau De Change segment.

Forex turnover is a critical metric in the financial world as it represents the total value of all foreign exchange transactions completed within a specific timeframe, providing insights into the liquidity and vibrancy of the forex market.

High turnover rates indicate a highly active market with numerous participants engaging in buying and selling currencies, which can signal investor confidence and economic stability.

In the last two weeks, the Central Bank of Nigeria and other banking institutions improved dollar supply to the foreign exchange market by $2.5bn.