Nigeria’s naira continued its rally against the US dollar last week, buoyed by a significant uptick in foreign exchange (FX) inflows, which rose by approximately 74% to US$1.79 billion.
Despite reduced FX intervention from the Central Bank of Nigeria (CBN), the naira gained N10.67 at the official market, closing at N1,528.56 per dollar on Friday. This momentum was largely driven by increased inflows from foreign portfolio investors (FPI), non-bank corporates, and exporters.
Data from Coronation Merchant Bank revealed that FPIs contributed 66.91% of total inflows, marking their seventh consecutive week as the primary drivers of FX supply. Non-bank corporates accounted for 16.51%, while exporters contributed 14.50%. Smaller inputs came from other corporate sources (0.82%) and individuals (0.12%).
On Thursday, the naira reached a high of N1,525.82/US$1, driven by strong supply-side dynamics.
FX analysts note that the resumption of international transactions using Naira-denominated cards by several banks may introduce short-term pressure on the exchange rate. Nonetheless, they expect relative stability to persist, supported by consistent foreign portfolio investment and robust non-bank FX inflows.
The naira’s outlook was further reinforced by the International Monetary Fund (IMF), which, in its 2025 Article IV Consultation report, commended the CBN for its FX market reforms. The IMF highlighted improved transparency and market integrity as key factors contributing to better price discovery and liquidity in the Nigerian FX market.
