Nigerian Naira Gains Strength Amid Foreign Portfolio Inflows

The Nigerian naira strengthened to 1,356 per U.S. dollar on the official market from 1,374 the previous week, while parallel market rates reached 1,404 per dollar. This rally is fueled by foreign portfolio inflows, dollar sales from exporters, and increased liquidity from oil companies.

Financial analysts attribute the currency's gains to attractive high-yield fixed-income assets and the high-interest-rate stance maintained by the Central Bank of Nigeria. These factors have increased the appeal of naira-denominated assets, leading to expectations that the currency will extend its gains into the following week.

Currency performance across the broader region remained mixed. The Kenyan and Ugandan shillings are expected to remain stable, while the Ghanaian cedi and Zambian kwacha are projected to weaken due to corporate demand and energy-related import costs. The Bank of Uganda is scheduled to announce a new interest rate decision on May 14.