The naira recorded its first weekly gain of the year on Friday at the official foreign exchange market, appreciating by N7.68 as improved liquidity, supported by the Central Bank of Nigeria, strengthened market sentiment.
The appreciation followed a rebound in dollar supply, which increased by 38 per cent month on month in December 2025, largely driven by higher foreign exchange sales by the Central Bank of Nigeria, according to data from FMDQ.
Figures released by the apex bank showed that the naira appreciated by 0.5 percent week on week, with the dollar quoted at N1,423.16 on Friday at the Nigerian Foreign Exchange Market, compared with N1,430.84 at the close of trading the previous Friday.
On a day-on-day basis, the local currency strengthened marginally by 0.2 percent from N1,419.71 quoted on Thursday at the same market segment.
Over the five trading days of the week, the naira gained N6.14, strengthening from N1,429.30 on Monday, which marked the first trading day of the year.
At the parallel market, also referred to as the black market, the naira traded flat at N1,490 per dollar.
Nigeria’s external reserves, which provide the Central Bank of Nigeria with room to intervene in the foreign exchange market and manage exchange rate volatility, also recorded an improvement during the period.
Data published on the Central Bank of Nigeria’s website showed that external reserves rose to $45.66 billion as of January 7, 2026, from $45.50 billion on December 31, 2025.
The increase represented a 0.4 percent rise and pointed to stronger inflows alongside reduced pressure on the foreign exchange market.
Total foreign exchange inflows into the market climbed by 38 percent month on month to $2.8 billion in December 2025, marking a rebound from the sharp 67 percent contraction recorded in November.
Despite the recovery, foreign exchange supply in December remained the second weakest level over the past 16 months, underscoring lingering fragilities in inflows.
Apart from domestic corporate inflows, which declined by 5 percent month on month to $420 million, all other sources of foreign exchange supply recorded improvements during the period.
Analysts at FBNQuest attributed the rebound in foreign exchange supply largely to increased activity by the Central Bank of Nigeria in the market.
Foreign exchange sales by the apex bank rose to $654 million in December, more than double the $318 million sold in the previous month.
According to the analysts, the stronger presence of the Central Bank of Nigeria reflects deliberate efforts to support market liquidity amid subdued participation from offshore investors, as foreign inflows remain relatively weak.
Foreign portfolio inflows increased modestly by 7 percent month on month to $632 million in December, representing a sharp slowdown compared with the $3.5 billion recorded in October.
The softer portfolio flows were attributed to reduced risk appetite toward year-end, a period during which foreign investors typically scale back deployable liquidity while engaging in profit taking and portfolio rebalancing.
“We expect renewed investor activity in the coming months, which should drive stronger momentum in inflows, supported by attractive domestic carry trade opportunities,” FBNQuest analysts said.
On the inflow components, foreign direct investment, the smallest segment, more than quadrupled to $50.1 million in December.
This represented an increase of 381.7 percent from $10.4 million recorded in the preceding month.
On the domestic front, foreign exchange inflows from exporters and importers, as well as individuals, also supported the month-on-month rebound.
Inflows from exporters and importers rose by 49 per cent to $683 million, while inflows from individuals increased by 88 per cent to $275.3 million.
