Naira Maintains Multi-Week Rallies as FX Inflow Spikes by 74%
The naira maintained its multi-week rallies against the US dollar in the currency market, with data showing the foreign exchange inflows into the Nigeria Forex Market (NFEM) rose by approximately 74% last week.
The strong volume of US dollars on the supply side kept the local currency exchange upswing despite declining FX sales intervention from the Central Bank of Nigeria (CBN). Last week, the naira appreciated further by N10.67 against the greenback at the official FX market, closing at N1,528.56 per dollar on Friday.
The surge was driven by foreign exchange inflows from foreign portfolio investors (FPI) during the week, non-bank corporates and exporters, which pushed the naira to a high of N1,525.82/US$1 on Thursday.
Foreign exchange inflows during the week rose to US$1.79 billion, up by about 74% from US$1.03 billion the prior week, according to a report from Coronation Merchant Bank research unit.
Analysts said inflow from foreign portfolio investors accounted for the bulk of inflows at 66.91%, marking the seventh consecutive week of their dominance of market inflows and signaling sustained interest in Nigerian fixed income instruments.
The non-bank corporates contributed 16.51%, while the exporters contributed 14.50%, Coronation Research said in its commentary note on Monday. Other corporate and individual sources made marginal contributions of 0.82% and 0.12%, respectively.
FX analysts said the resumption of Naira card transactions for international payments by many banks may exert renewed pressure on the exchange rate in the short term. “We anticipate relative stability supported by sustained foreign portfolio inflows and improved FX supply from nonbank corporates and exporters”, Coronation said.
The International Monetary Fund’s (IMF) positive assessment in its 2025 Article IV Consultation report, which commended the CBN for its ongoing foreign exchange market reforms, however, strengthened the naira outlook.
The IMF specifically noted that enhanced transparency and strengthened market integrity have supported better price discovery and improved liquidity in the FX market. #Naira Maintains Multi-Week Rallies as FX Inflow Spikes by 74% Money Market Rates Spike over Banking System Liquidity Squeeze
