The naira appreciated over the weekend, gaining 10 basis points to close at N1,520 per dollar, buoyed by sustained growth in Nigeria’s foreign exchange (forex) reserves.
Data from the Nigerian Autonomous Foreign Exchange Market (NAFEM) and the parallel market showed the naira rallying across both segments, with reserves rising for the ninth consecutive week.
At NAFEM, the naira strengthened by 1.0 percent to N1,520/$1, while the parallel market rate stood at N1,535/$1. This narrowed the gap between both markets to just N15, reflecting improved balance in forex demand and supply driven by steady inflows.
According to the Central Bank of Nigeria (CBN), Nigeria’s forex reserves increased by $232 million to close the week at $41.500 billion, up from $41.268 billion the previous week.
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Experts attributed the steady growth in reserves to increased foreign portfolio inflows and rising global oil prices.
Analysts at Cordros Capital Group noted that the naira’s resilience was supported by inflows from foreign portfolio investors alongside a $15 million CBN intervention during the week.
In an investor note, Bismarck Rewane’s Financial Derivatives Company Limited linked the surge in forex inflows to stronger oil prices and multiple inflow channels introduced by the CBN.
“In the near term, we expect naira stability to persist on the back of resilient forex market liquidity. Renewed capital inflows should be supported by the anticipated Fed rate cut and broader easing in global yields, which would enhance investor appetite for naira assets,” Cordros Capital stated.
The firm further projected that improved non-oil export receipts and reduced speculative activity would sustain the positive momentum in domestic forex inflows.
Analysts predict that Nigeria’s forex inflows from both domestic and foreign sources will remain robust, with projections suggesting they could surpass 2024 levels of $2.51 billion.
The latest trend, according to a 9am News report, reinforces investor confidence in Nigeria’s financial markets and provides a stronger buffer for exchange rate stability.
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