Market News

It had declined by 0.11 per cent in the previous week to close at 1530.26/$ on Friday.

Analysts at Anchoria Limited in its market update have projected that the naira would trade within a stable range of 1515–1535/$ this week. Pegging their projection on improved FX liquidity and renewed CBN intervention, including last week’s $50m sale and a successful OMO auction that attracted foreign investor interest.

 “These actions have helped ease demand pressures and boost market confidence, keeping volatility low,” Anchoria Limited said in a note.

“We expect the naira should stay stable, supported by CBN supply and exporter inflows, as upside pressure may arise from rising demand,” the statement added.

In the past week, the CBN conducted an OMO auction in the primary market, offering a total of N600bn across two tenors, 272-day and 363-day. Total subscriptions stood at N2.17tn, with the CBN allotting N1.25tn. The 272-day instrument recorded no sale, while the 363-day instrument settled at 21.99 per cent.

Cowry Assets Management Limited, in its weekly market report, also projected a positive and stable outing for the naira this week anchored on continued “CBN intervention, FX reforms gaining traction, and steady oil export revenues; the groundwork is gradually being laid for currency recovery and improved market sentiment.”

The firm blamed the depreciation of the past week on the rising demand for the U.S. dollar and constrained FX supply. Just as the naira depreciated at the official market, it had a similar run at the parallel market, depreciating by 0.97 per cent to settle at an average of 1,545/$1, down from 1,530/$1 the previous week.

“This pullback erased part of the currency’s recent gains, even as the Central Bank of Nigeria continued its interventions to defend the naira. The rising gap between dollar demand and supply remains a core challenge, though recent reforms suggest a path toward greater currency stability in the near term,” the Cowry Assets weekly report added.

At the parallel market, the naira closed trading at 1,540 per dollar, indicating an appreciation.

In the first half of the year, analysts said that the naira stabilised even though threatened by the elevated global risk-off sentiments triggered by US trade policies and heightened geopolitical tensions.

“These external shocks led to FX outflows of $22.83bn, as some investors shifted capital to US Treasuries and gold. In response, the CBN was active in the FX market, selling $4.72bn in the period,” CardinalStone stated in its mid-year outlook titled ‘Charting the Sustainability Path.’

Dismissing concerns about the interventions, CardinalStone stated, “We do not believe these interventions signalled a return to a fixed exchange rate regime or reflect an attempt to target a specific level for the naira. Rather, the current FX framework allows for discretionary interventions in the presence of perceived market distortions.

“Moreover, it is clear that the distortions witnessed in H1’25 largely stemmed from global factors and not idiosyncratic factors, as the CBN has taken steps to improve transparency.

“The bank’s average monthly FX intervention came in at $786.58m, materially lower than the $2.30bn pre-COVID and $1.38bn post-COVID levels previously used to defend the naira at unsustainable levels, despite underlying macro weaknesses. Encouragingly, both local and international observers now generally agree that the naira is trading close to its fair value.”