U.S. dollar inflows into Nigeria’s Foreign Exchange Market (NFEM) declined sharply in the latest reporting week, reflecting slower activity and reduced offshore investor participation, according to a new report by Coronation Merchant Bank’s research arm.
Total FX inflows fell by 20.67 per cent week on week to US$593.70 million, down from US$748.40 million recorded in the previous week. Coronation Research attributed the slowdown to early-year seasonality and a notable pullback by foreign investors, a trend that continues to shape liquidity dynamics in the official FX window.
Local sources remained the dominant contributors, accounting for 82.95 per cent of total inflows during the week. Individual inflows led the domestic segment with US$165.1 million, followed by the Central Bank of Nigeria (CBN) at US$128.00 million, while exporters and importers supplied US$115.6 million.
In contrast, external inflows weakened considerably. Foreign portfolio investors contributed just 17.05 per cent of total FX supply, as both portfolio and direct investment flows declined sharply.
Foreign portfolio investment inflows dropped by 72.91 per cent to US$46 million from US$169.8 million in the prior week, while foreign direct investment plunged by 81.87 per cent to US$7.00 million from US$38.60 million.
The naira opened the year with mixed performance across currency markets. At the official window, the local currency recorded a modest appreciation of 0.88 per cent, closing at ₦1,430.85 per U.S. dollar, supported by sustained CBN intervention.
However, pressure persisted in the parallel market, where the naira weakened to ₦1,490 per dollar, underscoring continued demand-supply imbalances outside the official framework.
Meanwhile, Nigeria’s gross foreign exchange reserves edged higher by 0.58 per cent to US$45.50 billion, reflecting an increase of US$264.56 million at the start of the year.
In the near term, analysts expect the naira to trade within a relatively stable range at the official market, supported by central bank supply and seasonal moderation in FX demand following year-end pressures.
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