Naira climbs to N1,337/$ as global diplomatic signals support investor confidence

The naira appreciated to N1,337 per dollar at the official foreign exchange window on Tuesday, improving from N1,344 recorded the previous day.

Figures published by the Central Bank of Nigeria show the latest rate represents the currency’s strongest official close since May 2024, when it traded at N1,329.65 to the dollar.

The gain reflects improved dollar liquidity, firmer performance in the parallel market, and shifting global geopolitical and monetary signals that continue to influence investor sentiment toward emerging economies.

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At the official market, the local currency strengthened from N1,344/$ to N1,337/$, extending its gradual recovery trend. In the parallel market, it also appreciated to around N1,382.5 per dollar compared with N1,393.35 recorded previously, suggesting better supply conditions and reduced speculative pressure.

Global developments also shaped market direction, as the dollar held broadly steady while investors monitored policy signals from the Federal Reserve regarding potential interest rate cuts this year. Diplomatic engagements between the United States and Iran helped ease geopolitical tensions, while ongoing negotiations linked to the conflict involving Russia and Ukraine supported a stronger global risk appetite.

Such external shifts often affect capital flows into emerging markets like Nigeria, where exchange rate stability remains sensitive to global liquidity conditions. Investors are also awaiting further economic data and policy signals from the United States for clearer direction on global growth and financial markets.

Meanwhile, governor of the apex bank, Olayemi Cardoso, recently highlighted Nigeria’s role in advancing discussions around a possible African single currency framework.

The central bank is expected to hold its next Monetary Policy Committee meeting later this month, where policymakers will review inflation trends, liquidity levels and exchange rate developments. At its previous meeting, the committee retained the Monetary Policy Rate at 27 percent, maintaining a tight stance aimed at curbing inflation and supporting the naira. Earlier, the rate had been reduced slightly from 27.5 percent to 27 percent, alongside a narrowing of the policy corridor to +250/-250 basis points.