Naira Mixed as FX Inflows Jump, External Reserves Cross $42bn
The naira traded on a mixed note at the Nigerian foreign exchange markets, reflecting a surge in demand for dollar at the official window while the unofficial rate rose.
At the Nigerian Foreign Exchange Market (NFEM), the naira skidded off the rally track on Monday even with data showing FX inflows increased in the market.
The Central Bank of Nigeria (CBN) updated FX data revealed that the official rate closed at N1,488.6017 per dollar at the official window.
The spot rate touched an intraday high of N1,492 per dollar, while the lowest transaction spot rate for eligible corporate FX users was consummated at N1,486.
This suggests there was a mild surge in dollar demand, as the CBN had funded the supply side with $150 million intervention sales last week. In spite of the sufficient liquidity, the naira weakened against the dollar, with a 0.05% decline to ₦1,488.60 per US dollar.
However, the naira appreciated by 0.25% at the parallel market to close at an average of ₦1,517 – in the absence of significant demand for hard currency at the unofficial currency market.
Last week, total FX inflows into the official window increased to US$605.00 million, up from US$550.90 million, the preceding week, according to Coronation Merchant Bank Research subsidiary.
The firm said in an update that foreign Portfolio Investments (FPIs) accounted for the largest share at US$251.70m (41.60%), followed by exporters at 19.72%, non-bank corporates at 13.33%. Foreign Direct Investments (FDI) at 8.94% and the CBN at 6.10%, while other sources contributed 10.32%.
Elsewhere, gross external reserves crossed $42 billion, its highest since September 2019 amidst fluctuation in prices of crude oil in the global commodity market. Updated data from the CBN revealed that gross external reserves increased to $42.032 billion as of September 19, 2025.
Brent crude spot posted a 1.25% decline last week as persistent concerns over oversupply and weakening demand overshadowed expectations that the first interest rate cut of the year by the U.S. Federal Reserve (Fed) would spur consumption.
The benchmark crude blend settled at US$66.15/bbl on Friday, down from US$66.99/bbl at the close of the previous week. This movement extended the year-to-date (YTD) losses from 10.25% to 11.37%, further highlighting the bearish momentum in the oil market.
In addition, the average Brent price for the year slipped marginally to US$69.81/bbl from US$69.88/bbl in the prior week. When compared to the average price levels recorded so far in 2024, this reflects a 12.58% decline.
The Fed’s policy stance remains a critical factor in shaping investor sentiment. Although the rate cut typically implies lower borrowing costs and, by extension, stronger consumption that should support oil demand, this outlook is clouded by the potential for further dollar weakness.
A softer greenback, while usually supportive of commodity prices, raises the risk that crude becomes more expensive for buyers in other currencies, thereby muting the expected positive effect of easing in monetary policy.
From the demand perspective, all major energy agencies, including the U.S. Energy Information Administration (EIA), have expressed concerns about slowing consumption growth, particularly in advanced economies.
Seasonal refinery maintenance turnarounds, during which plants shut units for routine overhauls, are also expected to limit near term crude runs, reducing physical demand in the coming weeks.
Meanwhile, U.S. inventory data pointed to a higher-than-expected build of 4 million barrels in distillate stockpiles, further stoking worries about slack demand in the world’s largest oil consumer and exerting additional downward pressure on prices. Excess Liquidity Worth over N2tn Keeps Market Rates in Check
