The naira recorded gains in the parallel market on Thursday, appreciating to N1,605/$1 from N1,610/$1 the previous day, as Nigeria gears up for the Eid-ul-Adha celebrations.
According to Nairametrics data, this marks the second time in four days that the currency has appreciated in the black market. The naira began the week on Monday at N1,610/$1, rose slightly to N1,607/$1 on Tuesday, and continued its upward trend into Thursday.
Public Holidays and Demand Surge
The Federal Government has declared Friday, June 6 and Monday, June 9, 2025, as public holidays to commemorate Eid-ul-Adha (Sallah). Analysts suggest that holiday-related spending is driving increased demand for naira, helping to temporarily strengthen the currency.
Performance in the Official Market
In the official exchange market, the naira has also shown steady appreciation. According to the Central Bank of Nigeria (CBN), the currency closed at N1,564/$1 on Wednesday—up from N1,579/$1 on Tuesday and N1,580/$1 on Monday.
Thursday’s official rate had not been released at the time of reporting, as the market was still open.
Naira vs. Other Major Currencies
The naira also gained ground against the British pound and the euro in the parallel market:
- British Pound: Started the week at N2,175/£1, appreciated to N2,165/£1 on Tuesday, briefly weakened to N2,210/£1 on Wednesday, and recovered to N2,160/£1 on Thursday.
- Euro: Began at N1,810/€1 on Monday, held steady on Tuesday, slightly depreciated to N1,815/€1 on Wednesday, and appreciated to N1,805/€1 by Thursday.
Previous Holiday Trends
This performance contrasts with the naira’s movement ahead of Easter in April 2025, when the currency fell in the official market to N1,600.50/$1, reflecting heightened demand for dollars.
What’s Driving the Naira’s Strength?
Economists attribute the naira’s latest appreciation to:
- Increased foreign portfolio inflows
- Holiday-driven demand for local currency
- Improved FX supply and investor sentiment
- Convergence between official and parallel market rates
Additionally, the June 3, 2025, deadline for Bureau De Change (BDC) recapitalization may have contributed to better FX discipline and market alignment.
Outlook
While the naira’s appreciation is a positive sign, analysts caution that sustaining these gains will depend on consistent foreign inflows, effective FX policy, and ongoing market reforms by the Central Bank.
The narrowing gap between official and black market rates signals improved confidence and could mark a step toward long-term currency stability.
