The Naira has shown significant strength against the US dollar, closing at N1,337.28 per dollar on August 28, 2026, marking a continued trend of appreciation over the past week. This upward movement is attributed to improved liquidity in the foreign exchange market and an increase in investor confidence, as reported by Legit.ng.

The local currency's performance reflects a 0.09 percent appreciation from the previous day's rate of N1,338.58 per dollar. The Naira started the week at N1,346.97 per dollar and has gained N9.69 overall, representing a 0.72 percent increase since Monday. This positive trajectory indicates a recovery in trading conditions within the Nigerian Foreign Exchange Market (NFEM), where enhanced liquidity has alleviated some of the pressures on the Naira.

Market activity throughout the week demonstrated this strengthening trend. On Wednesday, the Naira traded at N1,343.59 per dollar, before gaining N5.01 on Thursday. The recent improvements in the foreign exchange market are largely due to a rise in the availability of dollars, which has eased the pressure on the domestic currency.

The increase in dollar supply is crucial as it allows businesses and investors greater access to foreign currency, thereby stabilizing the Naira. Additionally, measures aimed at enhancing transparency and liquidity in the FX market appear to be contributing to more stable trading conditions.

Foreign portfolio investment has also played a significant role in supporting the Naira's strength. International investors are increasingly attracted to Nigeria's financial markets due to the relatively high yields available on Naira-denominated assets. This influx of foreign capital not only boosts demand for Nigerian assets but also enhances dollar liquidity in the market, further stabilizing the Naira.

In another positive development, Nigeria's external reserves have risen to $53.310 billion, up from $53.297 billion. This increase, although modest, is a vital indicator of the country's economic health and provides a buffer for external obligations and foreign exchange stability. The reserves have reached their highest levels since 2009, driven by robust oil earnings and increasing foreign exchange inflows.

As the Naira continues to appreciate and reserves climb, the outlook for Nigeria's foreign exchange position appears cautiously optimistic. However, the sustainability of this trend will depend on maintaining the improvements in dollar supply and investor inflows over the long term. The coming weeks will be crucial in determining whether these positive developments can lead to lasting stability for the Naira.