Naira Gains 4.3% on Tripartite FX Inflows Sources
The Nigerian naira experienced a rapid yet strong rally in the currency market as inflows from tripartite sources boosted US dollar liquidity in the official window.
In January, the naira rose by 4.30% to close the month at N1,474.78 in the official market, according to spot data from the FMDQ platform following the last FX intervention.
The Central Bank of Nigeria (CBN) sold US dollars to authorised dealer banks to strengthen the supply side. Also, the foreign portfolio investors and international oil companies’ inflows lifted the liquidity level in the forex market.
The naira rally was driven by inflows from Foreign Portfolio Investors (FPIs), substantial contributions from International Oil Companies (IOCs), and the CBN’s USD18.40 million intervention to authorised dealers, Cordros Capital Limited said in a note.
In its note, AIICO Capital Limited also corroborated the story of strong FX inflows from the tripartite sources, adding that the naira fluctuated within a range of $/₦1,490.00 to $/₦1,548.00, experiencing slight depreciation early in the week before strengthening midweek.
Trades ranged between $/₦1,440.00 and $/₦1,519.37, marking a stronger close for the naira, analysts said. The Apex Bank intervened in the FX market, offering $18.40 million to authorised dealer banks within the range of $/₦1,510 to $/₦1,515.
In the forwards market, the naira rates increased across contracts amidst sustained FX reform. Traders said in a report that forward FX contracts for 1-month gained +3.8% to N1,533.09 per US dollar, and 3-month contracts appreciated by +3.9% to NGN1,605.02.
Also, the 6-month forward FX contract rose by +4.3% to N1,705.97 while the 1-year contract climbed by 2.6% to N1,912.21 per dollar. Nigeria’s foreign reserves declined for the fourth consecutive week by USD218.05 million week on week to USD39.77 billion.
In its note, Cordros Capital Limited said the renewed interest of foreign portfolio investors in the FX market—driven by improved market confidence, a more efficient FX framework, and strengthening macroeconomic conditions—alongside the CBN’s sustained market interventions is expected to support naira stability in the short term.
Oil prices declined following the White House’s announcement of 25% tariffs on Canada and Mexico, set to take effect on Saturday. Brent crude settled at $76.81 per barrel, while West Texas Intermediate (WTI) traded at $75.84, marking weekly losses of 2.1% and 2.4%, respectively.
Meanwhile, gold prices surged past the key $2,800 level for the first time, driven by increased safe-haven demand amid U.S. President Donald Trump’s tariff threats. Concerns over global economic growth and inflationary pressures fuelled the rally, with gold closing at $2,801.29 per ounce.
OPEC+ is expected to maintain its current strategy of gradually increasing oil production when it meets on Monday. #Naira Gains 4.3% on Tripartite FX Inflows Sources Senate Promises Adequate Funding for Fiscal Responsibility Commission
