Nigeria’s naira gains support from remittances and investments as U.S. dollar weakens on Fed rate cut expectations.
The naira traded stronger at ₦1,550/$ in the parallel market after closing August at ₦1,531.57/$ officially. Gains were fueled by rising remittances and foreign portfolio inflows, with external reserves increasing by $1.72 billion to $41.3 billion.
CBN Governor Yemi Cardoso revealed diaspora remittances surged 200% to $600 million in two months, reducing reliance on oil revenues. Foreign investments also climbed to $1.7 billion in July. Analysts expect the naira to stay stable in the official market, though rising demand and a stronger U.S. dollar may cap gains.
Meanwhile, the U.S. Dollar Index fell after four straight losses, pressured by weak inflation data, legal setbacks to Trump’s tariffs, and expectations of a Federal Reserve rate cut in September. Traders now see an 88% chance of a cut, with speculation over whether it will be 25 or 50 basis points.
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