Naira Appreciates Against Euro as CBN's Tight Policy Supports FX Stability

The naira has strengthened against the euro in the official foreign exchange market, appreciating to N1,552/€ in mid-week trading. This is up from last week's rate of N1,563/€, and reflects the impact of the Central Bank of Nigeria's (CBN) tight monetary policy on exchange rate stability.

The CBN's sustained tightening has led to elevated interest rates and tighter liquidity conditions, which have reduced speculative demand for foreign currency. The unification of the official foreign exchange market and settlement of outstanding FX obligations have also contributed to increased confidence in the naira.

While the improved stability has eased panic buying in the parallel market, persistent inflation remains a key factor limiting stronger appreciation of the naira. Steady inflows from crude oil exports and diaspora remittances continue to support foreign exchange supply.