The Nigerian naira recorded minimal movement in the currency market last week as the Central Bank of Nigeria (CBN) executed two key interventions: clearing all outstanding FX forward obligations and supplying additional dollars to authorised dealer banks.
At the official window, the naira appreciated slightly by 0.01% week-on-week, closing at N1,533.56 per US dollar, compared to N1,533.73 the previous week, according to CBN spot rate data. Analysts say the clearance of FX forwards boosted investor confidence and improved supply prospects despite global headwinds.
The parallel market told a different story, with the naira depreciating by 0.52% to an average of N1,545/$1, driven by increased dollar demand from businesses and individuals amid market illiquidity.
Cordros Capital reported that the CBN injected $150 million into the market through dealer banks, helping to stabilise supply. AIICO Capital projected short-term stability in the naira’s performance, citing ongoing policy adjustments by the CBN.
Global factors weighed on sentiment, with Brent crude dropping over 4% to $66.8 per barrel and WTI falling 4.6% to $64.1. Nigeria’s Bonny Light crude slipped 3.28% to $70.74 per barrel on weaker demand expectations and anticipated supply increases from OPEC+.
On the domestic front, Nigeria’s external reserves grew by 1.56% week-on-week to $40.16 billion, providing a buffer against currency volatility.
Market watchers expect the naira to maintain its marginal gains at the official market, backed by CBN interventions, while global oil market uncertainty remains a key risk factor.
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