The Nigerian Naira posted strong gains last week against the US dollar in the official foreign exchange market, buoyed by significant inflows from exporters. According to data from the Central Bank of Nigeria, the exchange rate improved to ₦1,579.40/$, compared to the previous rate of ₦1,580.44/$.
This marks the second consecutive week of appreciation for the local currency, which gained 1.14% against the greenback. Analysts attribute the rally to FX interventions totaling $190 million and robust inflows from oil exporters and foreign portfolio investors.
Coronation Research revealed that total inflows into the Nigerian Autonomous Foreign Exchange Market (NAFEM) dropped by 21.28% week-on-week to $3.38 billion, down from $4.29 billion. Despite the decline, exporters dominated the market, accounting for 75.54% of dollar inflows.
The Central Bank contributed 2.98% to the total volume, while foreign portfolio investors and non-bank corporates contributed 9.72% and 9.61%, respectively. Other sources made up the remaining 2.15%.
In tandem with the increased FX supply, Nigeria’s external reserves rose by 0.48% to settle at $38.56 billion as of Friday, bolstering confidence in the local currency’s outlook.
Investors remain cautiously optimistic that continued policy reforms and export-driven FX supply will sustain the upward momentum in the Naira’s value in the weeks ahead.
