The Traffic

Naira Surges Ahead of Public Holiday, Gains Strongly Against Dollar
Abuja, Nigeria 

The Nigerian naira made a powerful comeback on Monday, posting its sharpest one-day gain in weeks against the US dollar in the official foreign exchange market—just a day before the nation observes a public holiday in honour of late President Muhammadu Buhari.

According to data from the Central Bank of Nigeria (CBN), the naira closed at ₦1,518.89/$1, gaining ₦11.37 from its previous rate of ₦1,530.26/$1 on Friday.

This marks the most notable appreciation of the currency in recent days, offering a glimpse of renewed investor confidence and improved liquidity at the official window.

Parallel Market Steady
While the official market saw a significant uptick, the naira remained unchanged at the parallel market, trading at ₦1,550/$1, maintaining the same rate as last week. This divergence continues to reflect the FX supply-demand gap and speculative sentiment in the informal market.

What’s Driving the Rebound?
Analysts attribute the naira’s rally to a combination of factors, including:

Anticipation of fresh inflation data from the National Bureau of Statistics (NBS) due out Tuesday.

Upcoming Monetary Policy Committee (MPC) meeting on July 21–22, where decisions on benchmark interest rates could impact the direction of the currency and overall investor sentiment.

Possible CBN interventions or enhanced dollar supply from remittances and oil sales.

“The market is likely reacting to expectations of tighter monetary policy or positive signals from recent fiscal reforms,” a Lagos-based economist noted.

Market Sentiment: Cautious Optimism
Though modest, the naira’s appreciation may signal a turning point or at least a pause in its recent slide, particularly as the Central Bank continues efforts to stabilize the forex market through policy tightening and regulatory oversight.

Investors and businesses alike are now watching closely for macroeconomic indicators, including inflation numbers and the MPC's interest rate decisions, both of which will offer clearer insight into the future of naira valuation.

By Haruna Yakubu Haruna