The Nigerian naira closed August with a modest gain against the United States dollar, reflecting renewed momentum in the foreign exchange market after weeks of volatility.
On Friday, the final trading day of the month, the naira appreciated in both the official and parallel markets.
In the parallel market, the local currency rose from N1,552/$ on Thursday to N1,545/$, while official data from the Central Bank of Nigeria (CBN) indicated an appreciation from N1,533/$ to N1,531/$ on the Nigerian Foreign Exchange Market (NFEM). Overall, the naira gained 0.14 percent against the dollar during the month.
Analysts attribute the performance to improved foreign exchange inflows, particularly from diaspora remittances and foreign portfolio investments (FPIs).
CBN Governor Yemi Cardoso disclosed that diaspora remittances surged by 200 percent to $600 million over the last two months, while offshore investor inflows rose from $1.5 billion in June to $1.7 billion in July.
Nigeria’s external reserves also strengthened, climbing by $1.72 billion to reach $41.3 billion, enhancing the apex bank’s capacity to intervene in the forex market.
Cardoso noted that improved remittance channels and stronger exchange rates have discouraged Nigerians abroad from using alternative routes to send money home.
He stressed that the growing contribution of remittances is reducing Nigeria’s heavy reliance on oil revenues and helping diversify foreign exchange earnings.
Meanwhile, developments in the global currency market provided mixed signals. The US dollar index (DXY) ended the week on a positive note as demand for the greenback picked up after three weeks of losses. Still, it hovered below the 98 mark, underscoring lingering concerns about monetary policy in the United States.
Federal Reserve officials continue to debate interest rate directions. Fed Governor Christopher Waller suggested that a 50-basis-point rate cut in September was unnecessary, emphasizing that upcoming labor and inflation data would be decisive.
Markets remain sensitive to political interference in Fed affairs, with recent controversies surrounding Governor Lisa Cook and former President Donald Trump’s push for more dovish voices at the central bank raising concerns about the Fed’s independence.
On the bond market side, US Treasury yields held steady, with the 10-year benchmark at 4.22 percent, close to a four-month low, while the 30-year yield settled at 4.90 percent.