Naira Appreciates Across Forward FX Contracts
The naira has seen significant appreciation across forward foreign exchange (FX) contracts, driven by investor optimism and improved market liquidity.
Last week, the naira appreciated across contracts in the forward FX market, reflecting investors; expectation about the local currency outlook.
This upward trend reflects solid market governance and growing investor confidence, with one year forward FX contract appreciating to N1879.61 per dollar, up by 4% week on week.
The local currency opened the month of July on a strong note at the Nigerian foreign exchange market (NFEM) after about 4% gain against the dollar last month.
In June 2025, the naira appreciated by 3.56% month on month to close at N1,529.71 per US dollar at the Nigerian Foreign Exchange Market (NFEM), investment firm AIICO Capital Limited said in a report.
Analysts stated that this gain was driven by consistent FX inflows from foreign portfolio investors, exporters, and remittances, alongside improved market liquidity.
The local unit began the month with a 2.08% weekly gain, trading as low as N1,535 per dollar supported by steady dollar supply and investor optimism, the report said.
The naira appreciation against the dollar persisted, with notable appreciation to N1,539.24 per dollar and a robust close of N1,529.71—its best level since March.
AIICO Capital Limited said a reported $500 million private placement with the CBN and intermittent intervention, including $61 million FX injection further enhanced dollar liquidity.
Late in the month, turnover surged to $324 million in a single session, reinforcing confidence. Despite these gains, Nigeria’s external reserves declined steadily, shedding $1.1 billion to settle at $37.21 billion, reflecting the CBN’s stabilizing interventions.
In the first week in July, the local currency also closed strong, supported by supply from foreign portfolio investors on the back of the OMO bills auction conducted last week.
In the forward FX market, the naira appreciated across contracts, according to Cordros Capital Limited. Forward FX contract for one month climbed by 1.1% to close at N1,566.00 per dollar, reflecting positive sentiment on the local currency outlook.
Forward FX contract for 3-month rose by 2.0% to N1,622.20 and 6-month climbed by +3.0% to N1,707.98. The investment firm reported that 1-year forward contract appreciated by +4.0% to N1,879.61 per dollar.
“The naira is likely to remain stable in the near term, supported by improving FX liquidity from domestic and foreign sources, alongside subdued demand pressures. Nonetheless, we highlight the possibility of gradual depreciation should global pressures reemerge”, Cordros Capital Limited said. #Naira Appreciates Across Forward FX Contracts#
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