MARKET NEWS

The naira has continued to maintain stability despite a decline in foreign exchange (FX) inflows over the past two weeks.

At the Nigerian Foreign Exchange Market (NFEM) on Monday, the naira appreciated slightly by 0.1 percent, with the dollar quoted at N1,531.95. This represents a marginal gain of N1.79 from the N1,533.74 quoted on Friday, the first trading day of August 2025, according to data from the Central Bank of Nigeria (CBN).

In the parallel market, also known as the black market, the naira closed flat at N1,560 per dollar, according to traders. Last week, the currency came under some demand pressure, falling from around N1,530 to N1,560 per dollar.

FX inflows, however, declined further, slipping to $791.10 million from $979.10 million the previous week, according to a report by Coronation Merchant Bank. Foreign portfolio investors (FPIs) remained the largest international contributors with $60.90 million, representing 7.70 percent of total inflows, while other international sources accounted for just 0.76 percent.

On the domestic front, non-bank corporates nearly tripled their share to $483.60 million (61.13 percent), while exporters and importers almost doubled their contributions to $168.60 million (21.31 percent). Inflows from the CBN and individuals stood at $68.40 million (8.65 percent) and $3.50 million (0.44 percent), respectively.

The report noted that the naira also posted a mild appreciation against the dollar last week following the International Monetary Fund’s (IMF) upward revision of Nigeria’s economic growth forecast. At the Nigerian Autonomous Foreign Exchange Market (NAFEM), the currency appreciated by 0.06 percent week-on-week, closing at N1,533.74 per dollar from N1,534.72 in the previous week. The parallel market rate remained unchanged at N1,540 per dollar, leaving the street market premium at N6.26, or 0.41 percent, above the official rate.

Meanwhile, Nigeria’s gross external reserves continued to build for the fourth consecutive week, rising by $726.80 million or 1.88 percent week-on-week to $39.36 billion as of Wednesday’s close.

“We expect the FX market to continue to trade within the $1,500 to $1,600 band, supported by sustained reserve accretion and positive sentiment from recent macroeconomic revisions. However, subdued FX inflows could limit further naira gains, keeping market dynamics sensitive to shifts in investor participation,” analysts at Coronation Merchant Bank noted.