By Boluwatife Oshadiya | June 30, 2026
Key Points
- The naira depreciated by 0.20% against the US dollar at the official foreign exchange market, closing at ₦1,383.63/$
- Rising foreign portfolio outflows from the equities market increased demand for dollars despite improved FX market liquidity
- Analysts warn that subdued FX inflows and cautious foreign investor sentiment could keep pressure on the local currency
Main Story
The naira weakened against the US dollar at the Nigerian Foreign Exchange Market (NFEM) on Monday as increased demand for foreign currency, driven by foreign investors exiting Nigerian equities, outweighed improved market liquidity.
According to data released by the Central Bank of Nigeria (CBN), the official exchange rate closed at ₦1,383.6262 per dollar, compared with ₦1,380.9329/$ at the end of the previous trading session, representing a depreciation of approximately 0.20%. During the session, the naira traded within a range of ₦1,377.50/$ and ₦1,390/$.
Despite the weaker exchange rate, activity at the official market strengthened considerably. Interbank turnover at the NFEM rose to $223.94 million, an increase of more than 80% from the $124.22 million recorded on Friday, indicating stronger demand for foreign exchange from banks processing international transactions for customers.
Market analysts said the increase in FX demand reflects continued portfolio adjustments by foreign investors, many of whom are reducing exposure to Nigerian equities amid changing global monetary conditions and growing domestic political uncertainty.
Recent data from the Nigerian Exchange (NGX) also showed that foreign portfolio investment (FPI) activity declined for the second consecutive month in May 2026. Foreign transactions fell 25.9% month-on-month to ₦183.6 billion from ₦247.8 billion recorded in April, reducing foreign investors’ share of total market turnover to 9.5%, compared with 13.7% in the previous month.
Although foreign participation weakened, domestic investors continued to support market activity. Domestic transactions increased 13.2% month-on-month to ₦1.8 trillion, accounting for 90.5% of total market turnover during the period.
What’s Being Said
Analysts said sustained pressure on the naira is likely unless foreign exchange inflows improve significantly.
“In the absence of sustained CBN intervention and stronger foreign currency inflows, pressure on the naira is expected to persist as foreign investors continue to reassess exposure to emerging markets amid a hawkish US monetary policy outlook,” analysts at MarketForces Africa said.
In a separate market note, CSL Stockbrokers Limited said investor sentiment could improve later this year if Nigerian equities are reclassified into the FTSE Russell Frontier Market Index and the anticipated listing of Dangote Refinery on the Nigerian Exchange materialises.
What’s Next
- Investors will monitor the CBN’s foreign exchange management strategy and any intervention in the official FX market.
- Market participants are awaiting further signals from the US Federal Reserve, whose interest rate decisions could influence global capital flows into emerging markets.
- Analysts will also watch whether the expected FTSE Russell Frontier Market Index reclassification and potential Dangote Refinery listing attract fresh foreign investment into Nigeria.
The Bottom Line: The naira’s latest decline highlights the growing impact of foreign portfolio outflows on Nigeria’s foreign exchange market. While domestic investors continue to underpin activity in the equities market, restoring foreign investor confidence through stronger FX liquidity, policy stability and sustained economic reforms will be critical to easing pressure on the local currency.
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