Naira strengthens against dollar amid rising reserves

Nigeria's naira strengthened against the US dollar at the end of trading on Friday, closing at N1,455.5 per dollar.

The improvement came from N1,461 to the dollar the previous day, according to data published on the Central Bank of Nigeria website. The movement reflects continued relative stability in the foreign exchange market after months of volatility that had pressured the currency.

Throughout the week the naira demonstrated resilience, avoiding larger swings that had characterised earlier periods. This steadiness follows policy measures by the central bank aimed at supporting the currency and rebuilding external buffers.

Foreign reserves rose to $42.8 billion, providing a stronger base for managing import payments and exchange rate pressures. The level represents an important cushion for Africa's largest economy, which relies heavily on oil exports for foreign currency earnings.

The Central Bank of Nigeria has in recent periods adjusted its approach to forex allocation and liquidity management. These steps appear to have contributed to the observed stabilisation, although analysts caution that sustained improvement will depend on broader economic factors.

Nigeria operates a managed floating exchange rate regime, with the naira having undergone significant liberalisation in recent years. The currency remains sensitive to global oil prices, investor sentiment and domestic inflation, which has stayed elevated.

The latest figures come as Nigerian authorities continue efforts to attract foreign investment and diversify revenue sources beyond petroleum. While the week's performance marks a positive development, longer-term stability will require consistent macroeconomic policies and structural reforms.

Based on reporting by Nairametrics.