Nigeria’s naira exhibited relative stability against the US dollar at the Nigerian Foreign Exchange Market (NFEM) on Monday, with the Central Bank of Nigeria (CBN) quoting an official spot rate of ₦1,598.68 to the dollar.
This steadiness in the exchange rate follows a week of gains largely attributed to improved dollar liquidity at the official window, while market analysts pointed to a slowdown in foreign currency demand as a contributing factor.
Meanwhile, the parallel market witnessed a slight depreciation of the naira, falling by 0.62% to close at ₦1,625 per dollar. This movement was driven by increased demand from Nigerians sourcing funds for both personal and business travel allowances.
Foreign reserves also saw a notable boost amid global commodity market volatility. Data from the Central Bank indicates Nigeria’s gross external reserves rose to $38.378 billion, supported by sustained foreign currency inflows into the local economy.
Over the past week, the USD/NGN pair trended lower, buoyed by positive investor sentiment, consistent FX inflows, and lower dollar demand. Even with minimal intervention from the apex bank, total sales reached $40 million by the close of the week, with trading moving within a narrow band of ₦1,595 to ₦1,603. By week’s end, the naira appreciated 46 basis points to settle at ₦1,598.72.
The robust FX liquidity at the official market helped suppress upward pressure on the naira. Currency market experts maintain that the local currency is likely to remain stable in the short term, thanks to ongoing support from CBN supply and export-driven inflows.
Nonetheless, market participants caution that any surge in dollar demand or a cutback in foreign exchange intervention could trigger fresh pressure on the naira.
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