Naira Gains Momentum On Strong FX Inflows, CBN Support

Sustained foreign exchange inflows and interventions by the Central Bank of Nigeria (CBN) are helping to keep the naira on course to test the next threshold. Market data suggest growing optimism that the currency could break the psychological barrier of N1,500 per dollar.

The local currency traded briefly below the psychological level of N1500 per dollar last week as the authority continued to fund the liquidity gap in the forex market.

A slew of analysts predict the naira will keep the momentum in the short term, though exchange rates expectations differ between N1500 to N1600 range per dollar at the official market.

Last week, the naira traded stronger throughout, supported by ample dollar liquidity from foreign portfolio investors (FPIs), oil exporters, and other offshore flows.

Early in the week, trades closed between N1500–N1514/$, with expectations tilted toward continued appreciation. Midweek, the CBN stepped in with moderate interventions, selling $29 million across sessions, Cordros Capital Limited reported.

The sufficient FX liquidity inflows further anchored naira exchange rates lower. AIICO Capital Limited said in a noted that fixing improved consistently, appreciating from N1507.89/$ to N1503.11/$.

Later in the week, activity slowed, spreads tightened, and demand modestly improved as sell pressure eased, though liquidity conditions remained favorable.

By week’s close, trades ranged between N1498.00–N1503.50/$, with the naira appreciating overall by 88.25 bps week on week to N1,501.4991 per dollar on Friday.

Updated FX revealed that gross external reserves rose $125.55 million to $41.66 billion. In the near term, the FX market is expected to maintain its current stability, AIICO Capital Limited reported.

Oil prices climbed Friday after a Ukrainian drone strike halted exports from Russia’s largest western port, though U.S. demand concerns capped gains.

Brent rose 0.93% to $66.99, and WTI gained 0.51% to $62.69. Gold advanced 0.4% to $3,648.55, near record highs, supported by weak U.S. labour data and Fed rate-cut bets.

Futures settled 0.3% higher at $3,686.40, marking a fourth straight weekly gain. Markets are closely monitoring potential sanctions or tariffs from the Trump administration targeting Indian and Chinese imports of Russian crude oil.