By IDNN Economy Desk
The naira strengthened this week, supported by carry trade inflows and a softer U.S. dollar. The move came days after the CBN’s surprise interest rate cut to 27%.
Traders said improved liquidity and rising reserves boosted market confidence. Nigeria’s external reserves stood at $42.03bn on September 19, the highest in six years.
Market Forces Driving the Rally
Global investors are seeking higher yields, and Nigeria’s elevated real returns have drawn carry trade interest. Meanwhile, the U.S. dollar weakened amid speculation of U.S. Federal Reserve easing, giving emerging currencies like the naira fresh room.
Stability or Temporary Relief?
Analysts warn the gains may be temporary if oil revenues falter or inflation pressures return. Still, the rally has offered breathing space for importers and investors tracking Nigeria’s currency reforms.
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