Market News

…Records 2.9% gain in nine months

The naira on Monday climbed to a five-month high of N1,497.46 in the official market, buoyed by easing demand pressure and improved foreign exchange (FX) liquidity.

The last time the currency was stronger than this level was on March 4, 2025, when it traded at N1,491.67 per dollar in the Nigerian Foreign Exchange Market (NFEM).

Year-to-date, the naira has appreciated by N43.9 or 2.9 per cent, after strengthening to N1,497.46 on September 15, 2025, from N1,541.36 at the beginning of the year. Daily, it gained 0.3 per cent or N4.03 on Monday, rising from N1,501.49 recorded on Friday, according to data from the Central Bank of Nigeria (CBN).

In the parallel market, also known as the black market, the naira appreciated to N1,525 on Monday compared with N1,530 last week.

Total FX inflows, however, fell to $550.90 million, slightly below the $567.20 million recorded the previous week, according to Coronation Merchant Bank Research.

Foreign Portfolio Investment (FPI) was the largest contributor, accounting for $303.8 million or 55.15 per cent. Exporters provided 17.61 per cent, while non-bank corporates contributed $91.3 million or 17.57 per cent. Other corporates accounted for $23.8 million (4.32 per cent), Foreign Direct Investment (FDI) stood at $18.7 million (3.39 per cent), the CBN contributed $13.0 million (2.36 per cent), and individuals supplied $3.3 million (0.60 per cent). Notably, the CBN did not make direct interventions during the week.

Nigeria’s gross external reserves also rose by $357.84 million or 0.8 per cent to $41.66 billion as of Thursday, supported by steady daily accretions.

The report noted that the naira recorded a strong performance against the dollar last week, appreciating by 0.98 per cent at the Nigerian Autonomous Foreign Exchange Market (NAFEM) to close at N1,501.50 per dollar. The parallel market also strengthened by 0.33 per cent to N1,535.00 per dollar, leaving the official rate at a N35.50 or 2.23 per cent premium to the parallel market.

Looking ahead, analysts expect the naira to trade within a narrow band in the near term, supported by sustained FPI inflows and healthy reserve levels. However, risks could resurface if portfolio inflows weaken or if FX demand surges ahead of the year-end festive season.

Bala Moh’d Bello, a member of the Monetary Policy Committee (MPC), noted in his personal statement that speculative activities in the FX market have declined significantly, improving transparency and promoting market-driven price discovery.

Another MPC member, Bandele A. G. Amoo, observed that while the naira is gaining strength in the official window, holiday-related dollar demand continues to weigh on sentiment in the parallel market.