Naira gained slightly against Dollar in August amid rising diaspora remittances and FX inflows.
NewsOnline Nigeria reports that the Nigerian naira recorded modest gains against the US dollar on Friday, strengthening in both official and parallel foreign exchange markets.
In the parallel market, the naira rose from ₦1,552/$ on Thursday to ₦1,545/$, while the Nigerian Foreign Exchange Market (NFEM) saw it appreciate to ₦1,531/$ from ₦1,533/$ the previous day.
By the end of August, the naira had gained 0.14% against the dollar in the NFEM, supported by higher foreign exchange inflows, including robust diaspora remittances and foreign portfolio investment (FPI).
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CBN Chief Yemi Cardoso highlighted that Nigerian diaspora remittances surged 200% to $600 million over the last two months, significantly boosting the country’s foreign exchange profile. Offshore investor inflows also increased from $1.5 billion in June to $1.7 billion, reflecting cautious but steady foreign interest amid favorable global macroeconomic conditions. Cardoso noted that improved remittance channels and stronger exchange rates are reducing Nigeria’s dependence on oil earnings.
Nigeria’s external reserves rose by $1.72 billion to $41.3 billion, giving the Central Bank of Nigeria (CBN) greater capacity to support the naira.
Global Dollar Trends
The US dollar index (DXY) ended August on a positive note, recovering some losses after three consecutive weekly declines, though it remained below 98, near the lower end of its annual range. Market attention is on the Federal Reserve, where policymakers, including Governors Christopher Waller and Lael Brainard, are weighing upcoming labor market data before deciding on interest rate adjustments.
Uncertainty over potential Fed leadership changes and political interventions, including disputes involving Fed Governor Lisa Cook and former President Donald Trump, have contributed to medium-term volatility expectations for the US dollar, despite stable short-term Treasury yields.
Outlook
Economists expect that Nigeria’s continued inflow of remittances and FPIs, combined with a resilient external reserves position, will support naira stability. However, global economic developments, US monetary policy decisions, and geopolitical tensions in Europe, particularly the ongoing Russia-Ukraine crisis, could continue to influence currency and market dynamics.
