Naira Sees Weekly Gain Amidst Zero FX Intervention
The naira closed at N1549.35 per US dollar at the official window, according to data obtained from the Central Bank of Nigeria (CBN), from N1553 at the beginning of the trading session last week. The currency market experienced a surge in foreign currency demand that eclipsed US dollar volume available for intraday FX settlement.
The naira strengthened week on week, gaining N4 on each dollar in the official window despite the absence of the CBN in the forex market. On Friday, the naira touched N1537 per US dollar in the forex market and a high of N1570 without FX inflows from the regulator.
Meanwhile, gross FX reserves declined for the fourth consecutive week, decreasing by USD232.05 million w/w to USD38.05 billion. In the forwards market, the naira rates appreciated across contracts, fueled by foreign investors’ optimism and market confidence.
Investment firm Cordros Capital Limited reported that FX forward for a 1-month contract rose by +1.4% to NGN1,583.16/USD, and 3-month climbed by +2.0% to NGN1,642.65/USD. Also, the 6-month FX forward contract appreciated by +3.0% to NGN1,724.76/USD, and the 1-year gained +4.8% to NGN1,887.05/USD.
“We note the improved inflows from Foreign Portfolio Investors (FPIs), which have primarily contributed to the stability of the naira. “However, persistent global pressures, which have now been exacerbated by the renewed tensions in the Middle East, remain a downside risk to sustained inflows and naira stability.
“Nonetheless, we expect the CBN to manage volatility in the short term through its intervention in periods of shocks”, Cordros Capital Limited said in a note. In its macro update, Zedcrest Research projected that official exchange rates will be range-bound at ₦1,600 to the US dollar in the second half of the year, but spot market interventions may become less frequent as reserves come under pressure.
“A widening gap between official and parallel market rates is likely, with black market premiums potentially rising beyond 5% as FX demand remains unmet across critical sectors including manufacturing, fuel imports, and financial services”, the investment manager added.
Zedcrest explained that Nigeria’s foreign exchange landscape is expected to be turbulent through the second half of 2025, shaped by weakening oil receipts and persistent pressure on external reserves.
Crude is expected to trade between $60 and $65 per barrel, well below the budget benchmark of $75 per barrel. On the bright side, steady growth in oil production is anticipated, projected to average between 1.6 and 1.7 million barrels per day.
“This cautious optimism is supported by intensified government efforts to improve security in key oil-producing regions, which could gradually stem losses from vandalism and crude theft.
“Additionally, strategic divestments to indigenous operators offer potential for incremental supply gains. Despite these positive drivers, production remains well below the official budget assumption of 2.06 million barrels per day at $75, creating a revenue gap estimated at over $10 billion, or roughly 30% of fiscal projections.
The firm said this shortfall, combined with subdued crude prices, will continue to strain the Central Bank’s ability to defend the naira amid already pressured external reserves, underscoring the need for sustained reforms and enhanced sector governance to stabilize Nigeria’s foreign exchange environment. #Naira Sees Weekly Gain Amidst Zero FX Intervention CBN Injects $580m into Forex Market to Defend Naira
