Nigerian Naira surpassed the US dollar in the currency market on Wednesday. Nigerian Forex Market (NFEM) saw an increase in local currency purchases in the Forex market. Naira touched on the daytime high of n1536.50 compared to N1543 on Tuesday. Trust in local currency comes after the country’s external reserves increase to $4029.2 billion as oil production increases.
Why does Nigerian Naira oppose the US dollar?
Nigerian Naira is rising against the US dollar under various parameters of the currency market. Two main reasons are Naira and central bank oil sales, which will take concrete steps to solidify the currency via new debit cards for non-residents of Naira. The government announced last year that all oil and energy transactions must be resolved in local currency. The country’s top and small refiners accept naira for deals and stand by the US dollar.
Additionally, the Central Bank of Nigeria has resumed its Naira debit card after a three-year break. This allows Nigerians to pay in naira rather than USD even when they are abroad. Therefore, all transactions via debit cards take place in local currency, saving users’ conversion fees and exchange rates. In addition to transactions outside of Nigeria, debit cards also allow ATM withdrawals and purchases on international websites in local currency.
With the recovery of the international local currency and Naira for Oil rules, it was better than the US dollar. Also, as the DXY index is weakened weekly, in 2025, USD will be in a downward spiral. From tariffs to trade wars and global policy changes, Greenback faces external heat. Despite multiple attempts this year, we were unable to climb above the 100 mark. All of this has made Nigerian Naira surpass the US dollar in the currency market.
