On Tuesday, the naira registered a 0.8% gain against the dollar in the official foreign exchange (FX) market, closing at N1,540.04, up from N1,553.11 prior to the recent public holiday. This positive movement comes despite a notable decline in weekly inflows, a testament to the Central Bank of Nigeria’s (CBN) ongoing efforts to stabilize the currency.
Data from the CBN revealed that the naira appreciated by N13.07 by the end of trading on the Nigerian Foreign Exchange Market (NFEM). In contrast, the parallel market, often referred to as the black market, saw the local currency trading flat, closing at N1,607—a slight decline of N2 from N1,605 before the holiday break.
A report from Coronation Merchant Bank Limited’s research arm indicated that the NFEM recorded inflows of $780 million last week, a decrease from the $1.04 billion reported the previous week. The breakdown of these inflows showed that exporters contributed 18.83%, the CBN accounted for 19.78%, foreign portfolio investors (FPIs) made up 32.47%, non-bank corporates represented 27.60%, while other sources contributed 1.32%.
Despite the decline in inflows, the naira’s performance remains noteworthy, particularly as it ended the previous holiday-shortened week with its strongest showing since December 2024, appreciating by 2.13% week-on-week to close at N1,553.12 per US dollar. The parallel market mirrored this momentum, gaining 2.13% week-on-week to finish at N1,585.00 per dollar. This positive trend has been largely attributed to increased inflows from foreign portfolio investors.
In the forward market, the 1-month forward rate closed at N1,606.00 per dollar, the 3-month contract settled at N1,675.50, the 6-month forward rate ended at N1,776.30, and the 1-year forward rate concluded at N1,977.47 per dollar.
The CBN’s proactive measures to enhance liquidity and bolster investor confidence have played a crucial role in supporting the naira’s recent gains. Market sentiment remains optimistic, buoyed by capital market inflows and a renewed sense of confidence among investors, even amidst fluctuating weekly inflows.
