Market News

By Oluwakemi Abimbola

The naira appreciated and stayed below the 1,500/$ threshold for 10 consecutive trading sessions at the official market, data from the Central Bank of Nigeria can indicate.

The domestic currency had traded below the N1,500/$ threshold for the first time in over six months on September 15, when it closed trading at 1,497/$. Since then, the naira has strengthened and closed Friday’s trading at 1,480/$.

At the parallel market, the currency had recorded some positive sentiments too, as it appreciated 0.13 per cent to an average of 1,510/$.

Over the past week, external reserves added another layer of support, rising to $42.23bn from $42.03bn, a 0.47 per cent appreciation which analysts said enhanced the apex bank’s ability to manage supply-demand gaps and bolsters confidence in the naira’s near-term stability.

Reviewing the performance of the naira in the past week, AIICO Capital highlighted improved liquidity from local participants, oil inflows, and offshore portfolio investors as providing the base for the continued rally of the currency.

“Early sessions opened actively, with bids largely matching available supply, anchoring trades around N1,492–N1,495/$. Midweek, tight demand and supply dynamics initially pressured the market, pushing the rate to N1,498.00/$, before improved local dollar flows and modest CBN interventions (estimated at $20m across sessions) restored calm.

Toward the week’s close, liquidity conditions remained favourable as FPI inflows sustained an offered market tone, driving the naira firmer into the N1,471– N1,487/$ range. Overall, the currency appreciated by c.49 bps w/w to close at N1,480.66/$ at the NAFEM,” read the report.

It maintained that the recent stability in the FX market will be sustained in the near term, as the CBN continues to fine-tune its policies alongside fiscal measures by the FGN aimed at supporting liquidity.

Cowry Asset Management Limited echoed similar sentiments, saying, “Looking ahead, the naira is expected to stay relatively stable across markets, supported by stronger FX inflows, reserve build-up, and sustained Central Bank of Nigeria interventions.”

Meanwhile, experts have commended the decision of the Monetary Policy Committee of the CBN to cut the rate by 50 bps, anticipating that the measures will ease financing pressure on the real sector and reinforce stability in the FX market. In the fixed-income market, yields are likely to trend lower, diminishing relative attractiveness, while equities could benefit as investors reprice assets in line with a more stable macroeconomic outlook.