The naira appreciates to ₦1,610/$1 in the parallel market, signaling short-term recovery and renewed economic optimism in Nigeria.
The naira appreciated to ₦1,610 per US dollar in the parallel market on Monday, strengthening from Friday’s rate of ₦1,630/$1. This rebound comes after a turbulent May, during which the naira dipped by 1.24% in the black market, reaching a low of ₦1,635/$1 mid-month.
Between May 21 and 29, the naira showed modest stability, trading between ₦1,618/$1 and ₦1,625/$1. This suggests reduced volatility, despite overall depreciation during the month.
Official Market Sees Relative Stability
While Monday’s official closing rate was pending at press time, Central Bank of Nigeria (CBN) data indicated the naira remained relatively stable between May 23 and 30, fluctuating from ₦1,579/$1 to ₦1,592/$1. It marked a 1.28% monthly gain, contrasting with the earlier part of May when it traded around ₦1,607/$1 to ₦1,612/$1.
Gains Against Other Major Currencies
The naira also appreciated against the British pound, moving to ₦2,175/£1 from ₦2,190/£1, and against the euro at ₦1,810/€1 from ₦1,815/€1.
Moody’s Upgrade Sparks Optimism
Adding to the optimism, Moody’s upgraded Nigeria’s sovereign rating from Caa1 to B3, citing improvements in fiscal health, FX reserves, and external balances. The agency credited recent reforms in FX management for bolstering investor confidence and stabilizing the economy.
President Bola Tinubu welcomed the upgrade as validation of his administration’s economic strategy, aimed at curbing inflation, lowering borrowing costs, and restoring long-term prosperity.
Outlook
Despite short-term gains, analysts warn that without consistent reforms and stronger reserves, the parallel market may remain volatile.
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