Naira gains to N1552/€1 as CBN policies tighten liquidity, inflation lingers
The naira strengthened to N1552 per euro in the mid‑week official market session, up from N1563/€1 the previous week and trading within a N1,550–N1,575/€1 band after touching yearly highs near N1,684/€1 in early January. The CBN’s sustained policy‑rate hikes and a narrowing reserve ratio have withdrawn excess naira liquidity, easing pressure on the foreign‑exchange market. This, together with the unification of official FX windows and the clearing of backlog trades, has reduced parallel‑market panic buying.
For Nigerians, a firmer naira lowers the cost of imports and foreign‑currency expenses, which could ease inflationary pressures on goods priced in euros or dollars. However, headline inflation remains high, continuing to erode real purchasing power despite the currency gain and steady inflows from oil exports and remittances.
Readers should note that the appreciation may be temporary if inflation does not subside, and that the ECB’s move toward easing could reduce the yield advantage of euro‑denominated assets, affecting returns on euro‑based investments. With markets pricing a 35.8% chance of a Fed rate hike this month and geopolitical tensions in the Red Sea influencing oil prices, individuals and businesses might review foreign‑exchange exposure, consider hedging strategies, and monitor CBN policy announcements for further moves.