The Naira Had a Better Week. Here’s What Happened.

If you bought dollars last week, you may have noticed something interesting: they got a little cheaper.

The naira started the week at ₦1,332.94/$ on Monday and ended Friday at ₦1,321.22/$. That’s a ₦11.72 drop in the dollar rate, or about 0.88%.

But the more interesting part was what happened in between.

By Thursday, the dollar had fallen as low as ₦1,315.67/$, before moving back up slightly on Friday. So, while the naira did not end the week at its strongest point, it was still in a better position than where it started.

So, why did the naira strengthen?

Think of it simply as a question of how many dollars are available compared with how many people need them.

Last week, the market saw stronger dollar inflows, supported by sources such as oil earnings, foreign investments, and remittances. Nigeria’s foreign exchange reserves also crossed $54 billion, reaching their highest reported level in almost 18 years.

More dollars in the system can ease the pressure on the naira. And that is what we saw reflected in the official FX market during the week.

Interestingly, this happened even though overall FX trading volume was lower than the previous week. So, it wasn’t simply about more people trading—it was also about the balance between dollar supply and demand.

Of course, the story doesn’t end here. Global movements in the US dollar, oil prices, foreign inflows and local demand for dollars will continue to influence where the naira goes next.

For now, the naira had a good week. The bigger question is: can you keep up?

We’ll be watching the market and bringing you the story again next week.

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