The Central Bank of Nigeria (CBN) conducted a series of FX interventions amounting to $250 million last week as it moved to protect the naira amid mounting currency pressures in the official market.
The intervention followed a week of heavy selloffs, during which the naira weakened by N14 despite the CBN’s efforts to increase market liquidity. The central bank sold the dollar volume to authorised dealers and banks, absorbing the equivalent naira liquidity as part of its currency defence strategy.
According to Cordros Capital, strong FX demand from corporates looking to secure imports ahead of the festive season contributed to the currency’s depreciation. The firm noted that demand outpaced the CBN’s injection, leaving the naira vulnerable despite earlier gains that saw rates briefly strengthen below N1430.
Nigeria’s external reserve position improved slightly during the week, rising by 1.10% from $43.64 billion to $44.12 billion, supported by oil inflows, non-oil receipts, and a solid trade surplus, according to Cowry Asset.
Analysts expect that the FX market will likely remain cautious, reacting primarily to inflow strength rather than speculation. They warn that unless inflows pick up, the naira may continue to face intermittent pressure.
However, the gradual uptick in reserves and consistent CBN interventions are expected to help stabilise the market, even though structural imbalances in supply and demand still remain.
Cordros Capital projects that stronger reserves, a positive current account position, and global monetary easing will help improve investor sentiment and attract fresh FX inflows.
Global market conditions also weighed on currencies and commodities. Oil prices dipped nearly 1% as U.S.-led peace efforts in the Russia–Ukraine conflict raised prospects of higher future crude supply.
Brent crude: down 2.84% to $62.56
WTI: down 3.15% to $58.06
Gold also posted a modest drop as bets on a December U.S. rate cut increased following dovish Federal Reserve signals. Spot gold fell 0.34% to $4,065.90/oz, while U.S. gold futures slipped 1.79% to $4,009.80.
Analysts expect commodity prices to show mixed trends next week as investors continue to hedge expectations around a potential December rate cut and evolving supply conditions.
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