The Nigerian naira posted a gain against the US dollar following a $96.3 million intervention by the Central Bank of Nigeria (CBN) into the official foreign exchange (FX) market. This strategic move helped stabilize the naira amid cautious investor optimism and eased demand pressures in the FX window.
According to the latest data from the CBN, the official spot rate closed at N1,529.71 per US dollar on Monday, down from N1,539.23 recorded at the end of the previous trading week. Analysts attribute the naira’s appreciation to increased forex supply and renewed interest from foreign portfolio investors.
Coronation Research reported that FX inflows into the Nigerian market reached approximately $1.03 billion last week. Portfolio investors, who remain the dominant contributors to Nigeria’s FX liquidity for the sixth consecutive week, accounted for 36.98% of inflows. Non-bank corporates followed closely with 27.56%, exporters with 22.39%, and other sources comprising the remaining 13.06%.
The parallel market also reflected the trend, with the naira appreciating by 1.90% to settle at N1,575 per US dollar. Analysts believe that the continued inflow of funds from foreign investors and exporters has helped strengthen confidence in the naira and maintain liquidity in the FX market.
Despite a moderate decline in external reserves, market watchers expect the naira to remain relatively stable in the near term, buoyed by a mix of CBN intervention, foreign portfolio inflows, and corporate forex supplies.
Coronation analysts, however, flagged potential risks, including declining oil prices and fluctuating production levels, which could affect future FX receipts from crude oil exports. They emphasized that sustained investor interest in fixed income securities could further support the currency, provided FX reserve buffers are maintained and intervention strategies remain active.
The naira’s performance signals improving sentiment in the currency market, especially as the CBN continues efforts to stabilize the economy and restore investor confidence.
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