Naira strengthens to N1,557/€ as euro weakens

The naira strengthened against the euro on Friday, appreciating to N1,557 per euro at the official foreign exchange market as sustained monetary tightening by the Central Bank of Nigeria (CBN) continued to support the local currency.

Latest data from the CBN showed the naira closed at N1,557/€1, improving from N1,570/€1 recorded in the previous trading session.

The latest appreciation extends the naira’s recovery against the European currency, with the EUR/NGN exchange rate retreating sharply from its January 2026 peak of about N1,774/€1 to around N1,555/€1, its lowest level in several months.

Since the beginning of July, the euro-naira exchange rate has traded within a relatively narrow band of N1,561/€1 to N1,576.7/€1, reflecting improved stability in the foreign exchange market.

Analysts attributed the naira’s resilience to the CBN’s tight monetary policy, which has helped attract portfolio inflows while moderating pressure on the domestic currency.

The apex bank’s decision to maintain elevated interest rates has supported investor confidence and contributed to a more orderly depreciation path for the naira despite persistent external risks.

The narrowing gap between official and parallel market exchange rates has also reflected the impact of the CBN’s interventions aimed at improving liquidity and reducing market distortions.

Meanwhile, the euro traded around $1.14 against the US dollar in London on Friday after posting marginal losses in the previous session.

The European currency has remained under pressure as the European Central Bank (ECB) maintained its key policy rates at 2.25 per cent for the deposit facility, 2.40 per cent for the main refinancing operations and 2.65 per cent for the marginal lending facility, while signalling that uncertainty surrounding inflation and energy prices remains high.

Market sentiment was further influenced by expectations that the US Federal Reserve could resume monetary tightening. According to the CME FedWatch Tool, markets priced in a 35.8 per cent probability of a rate increase in July and an 82.1 per cent likelihood of at least a 25-basis-point increase in September.

Geopolitical tensions also continued to weigh on global currency markets following renewed hostilities in the Middle East, including attacks on Saudi oil tankers in the Red Sea by Yemen’s Iran-backed Houthi militants and continued US military operations targeting Iran.

The renewed conflict has pushed international crude oil prices higher, reinforcing demand for the US dollar as a safe-haven asset and increasing uncertainty across global financial markets.

Despite these external pressures, the naira has remained relatively stable against the euro, supported by improved foreign exchange management, tighter liquidity conditions and sustained investor inflows into Nigeria’s fixed-income market.