Naira Strengthens as Forex Inflows Boost Market Confidence

Nigeria’s local currency is showing signs of renewed strength, as the naira strengthens on rising forex inflows, bringing a wave of optimism to investors and market watchers. After several weeks of fluctuation, the naira appreciated by 0.72 percent, reflecting steady improvements in dollar supply and increased foreign investment activity.

Improved Dollar Supply

According to market analysts, higher inflows from oil exports, diaspora remittances, and foreign portfolio investments have contributed significantly to the naira’s rebound. The consistent rise in foreign exchange inflows has helped reduce pressure on the market while restoring confidence in Nigeria’s monetary direction.

The official window recorded a modest recovery, with the naira closing stronger against the U.S. dollar. Traders in the parallel market also noted improved liquidity and reduced volatility — both positive signs for short-term market stability.

External Reserves on the Rise

Adding to the upbeat momentum, Nigeria’s external reserves grew steadily, signaling stronger national capacity to meet forex obligations. Analysts see this as evidence that the Central Bank’s efforts to attract foreign currency are beginning to pay off.

Equity Market Joins the Rally

The bullish sentiment wasn’t limited to the currency market. Nigerian equities also advanced, with several sectors posting weekly gains. Industrial and consumer goods led the way, showing investors’ renewed appetite for local opportunities.

Outlook: Cautious Optimism

Financial experts advise cautious optimism, noting that the sustainability of the current uptrend depends on maintaining consistent forex inflows and managing import demand. Any sharp changes in global oil prices or external remittance trends could still influence the naira’s direction.

For now, the overall outlook remains positive as the naira strengthens on rising forex inflows, marking a hopeful sign that Nigeria’s financial landscape is gradually stabilizing after months of uncertainty.

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