Naira Outlook Positive, Banks Buy Dollar from Customers at N1,480
The naira exchange rate outlook has remained positive across foreign currency market as local deposit money banks buy dollar from customers at N1,480. International payment transactions with naira debit card were consummated at the average of N1,530, based on fx payments conducted across channels.
A growing numbers of investment banking firm are bullish on the naira outlook, citing sustained FX interventions and growing external reserves as buffer for the local currency to thrive. FX market witnessed stronger performance for the naira across key trading segment on the back of strong US dollar volume, and fx sales to banks.
The local currency closed stronger week on week at the official window, data from the Central Bank of Nigeria (CBN) confirmed. The Official spot rate settled at N1514 from N1,531.57 due to absence of significant FX demand pressure.
At the parallel market, the naira closed the stronger at N1538, gaining N7 over the week. Recalled that the forex market opened the week on a calm note, with balanced flows keeping rates stable around $/₦1527–1533 and no need for CBN intervention.
By midweek, offshore supply and opportunistic buying supported sentiment, lifting forex market fixing to $/₦1528.13. Activity remained fluid with tight bid-offer spreads, as rates retraced to $/₦1527.00 before stabilizing.
Momentum improved further as the CBN intervened with $15 million and additional portfolio flows boosted supply, driving a sharp rally to the $/₦1519–1523 range.
At the close of trading session, the naira sustained gains, trading between $/₦1508.00 and $/₦1529.00. Overall, the currency appreciated strongly, closing at $/₦1,514.8671, while foreign reserves rose by $232.10 million to $41.49 billion.
FX analysts at AIICO Capital Limited maintained that the naira is expected to remain stable in the near term, supported by improved US dollar supply
The parallel market posted a marginal gain, with the naira strengthening by 0.02% to an average of N1,538/$1, reflecting renewed trader confidence and eased speculative pressures in the informal market.
Oil prices retreated on Wednesday as investors turned their focus to the upcoming OPEC+ meeting, where the alliance is expected to decide on production levels for October. West Texas Intermediate (WTI) crude slipped by 2.0% to settle at $64.34 per barrel, while Brent crude declined by 1.76% to $68.02 per barrel.
The meeting comes at a critical time, as member countries have been gradually unwinding earlier supply cuts implemented to stabilize the market. In September, the group agreed to raise production by 547,000 barrels per day (bpd), effectively completing the reversal of the 2.2 million bpd output reduction introduced during the height of market weakness..
In contrast, Nigeria’s Bonny Light crude slipped by 0.92%, closing at $70.33 per barrel. On the macroeconomic front, the country’s external reserves recorded a modest uptick, rising by 0.10% week-on-week to $41.31 billion from $41.27 billion, largely supported by stronger foreign inflows.
This incremental build-up in reserves, though small, provides an important buffer against external vulnerabilities such as volatile oil prices and currency pressures. It also offers the Central Bank of Nigeria (CBN) greater capacity to intervene in the foreign exchange market when necessary, helping to stabilize the naira in the near term.
“In the coming week, we expect the naira to trade relatively stable across both the official and parallel markets, supported by sustained dollar inflows and a modest buildup in external reserves.
“However, pressures from speculative demand and global oil price volatility may cap further gains. The outcome of the OPEC+ meeting will be a key driver for crude oil prices, with any adjustments to production levels likely to influence Nigeria’s external earnings and, by extension, FX market dynamic”, Cowry Asset Limited said in a note #Naira Outlook Positive, Banks Buy Dollar from Customers at N1,480
