US Dollar Inflow into Nigeria’s FX Market Sinks by 25%
The total US dollar volume that flowed into Nigeria’s foreign exchange (FX) market sank by more than 25% week on week to $672 million, according to Coronation Merchant Bank Limited.
This marked the third consecutive weekly decline in November, reflecting a US dollar shortfall in the official window. The lower FX supply fuelled naira depreciation that forced the Central Bank of Nigeria to intervene by selling $50 million to authorised dealers and banks.
Last week, the Naira witnessed a mixed performance across the various FX market segments. At the official window, Naira weakened by -0.41% week on week to close at N1,442.43/US$1 from N1,436.58/US$1 in the prior week.
Meanwhile, the parallel market rate strengthened by 1.03% week on week, settling at N1,450.00/US$1, narrowing the gap between the official and parallel market rates to 0.52% from 1.98% in the previous week.
Inflows into Nigerian Foreign Exchange Market (NFEM) declined by 25.23% to US$672.30 million, from US$899.20 million in the previous week. FX inflows peaked at $1.37 billion early in November.
The slowdown in US dollar funds reflect aggressive selloffs in naira assets at the fixed income market due to pressures from new capital gain tax. Foreign investors converted significant amount from naira to dollar, putting stress on the local currency.
Foreign Portfolio Investors (FPIs) remained the dominant contributors, accounting for 34.42% or US$231.40 million of total inflows, followed by Non-Bank Corporates (25.70%), Exporters (22.47%), Individuals (7.56%), and CBN (5.52%) while other sources contributed 4.33%., Coronation said in a report
On the reserves front, gross external reserves rose marginally by 0.24% w/w (US$103.06mn) to US$43.43bn (as of 13th November 2025). We expect the Naira to remain anchored below N1,500/US$1, supported by improved liquidity conditions, and CBN interventions.
Elsewhere, Oil prices traded with a modest upward trend early in the week as geopolitical risks resurfaced. Fresh U.S. sanctions on Russian oil, combined with Ukrainian drone strikes on key refineries, revived supply-disruption concerns and supported prices.
Analysts at Coronation noted that market optimism over a possible resolution of the U.S. government shutdown added to the early gains, although persistent expectations of a global crude surplus kept the prevailing sentiment cautious.
The announcement of a force majeure by Lukoil at an Iraqi asset highlighted the potential material impact of the sanctions on physical supply. Midweek, prices reversed sharply as a new OPEC outlook projected that global supply and demand would reach equilibrium by 2026— marking a notable shift from earlier deficit forecasts.
This, alongside the IEA’s unexpectedly bullish long-term demand outlook extending to 2050, weighed on sentiment and highlighted diverging views on the effect of energy transition. Investors continued to reassess how U.S. sanctions on Russia might ripple through crude and refined products markets, contributing to renewed volatility.
Coronation Research said toward the end of the week, prices stabilised following a steep decline triggered by oversupply concerns and a larger than expected build in U.S. crude inventories. Gains were further capped by weaker than hoped draws in gasoline and distillate stocks.
“However, Brent spot closed the week slightly higher as supply worries resurfaced after a Ukrainian drone attack forced a temporary halt of exports from Russia’s Novorossiisk port”.
The marginal recovery trimmed Brent’s year-to-date loss to 14.32%, while the average price for the year inched up to US$68.88/bbl, though still down 13.75% from 2024 levels. Dangote, BUA Drag Total Value of Cement Stocks Down by N1.47trn
