Naira Softens in July, External Reserves Rise by $2.15bn
The naira softened in July by approximately N4 at the official window, according to the Central Bank of Nigeria (CBN) FX update. The spot FX rate appreciated to N1533.33 per dollar at the Nigerian Foreign Exchange Market (NFEM) in the absence of dollar demand pressures on Thursday from N1534.52 the previous day.
Further review of FX update from the CBN showed that the naira touched an intraday high of N1535 compared with N1537 per dollar reached in the previous day. FX rate hit an intraday low of N1533 on Thursday amidst a slowdown in the CBN FX intervention.
The naira opened in July at N1529.27 per dollar, according to data obtained from the CBN platform, showing that the exchange rate worsened by N3.85 in July despite persistent inflows into external reserves.
In the last 30 days, Nigeria’s gross external reserves increased by $2.15 billion, settling at $39.359 billion as of July 30 from $37.210 billion at the end of June, 2025. The CBN has reduced its market intervention sharply, though the authority remains active, watching the exchange rate stay within the target band.
Some critics think the CBN is playing hard in the forex market. Nigeria has been generating dollar inflows through Open Market Operations (OMO) issuance priced at attractive spot rates across primary market auctions in the second half of 2025.
Analysts at Verto FX said in a note that the CBN has clearly been testing the waters across different durations with their issuance.
Despite annualised yields on primary paper back above 24%, clearly three-month tenors were not generating the appetite expected from foreign investors, who continue to target 6-month to 1-year OMO auctions.
The firm said the pace at which OMOs are expiring will continue to ramp up in 2025, and there is still an expectation that new OMOs will be issued to allow investors to easily roll positions and keep liquidity tight in-country.
This strategy is arguably coming into question, with M2 supply seeing a modest increase, suggesting that some foreign investors have converted their local currency back into US dollars upon OMO expiries, Verto FX said in an update. #Naira Softens in July, External Reserves Rise by $2.15bn Oil Jumps as Trump Threatens India for Buying Russian Crude
