The Naira experienced a noticeable downturn last week, depreciating by 0.99% at the official Nigerian Foreign Exchange Market to N1,456.72/$ as of Friday.
This figure compares with the N1,442.43/$ recorded in the previous week.
On the parallel market, the local currency weakened slightly, trading within a range of N1,470/$ and N1,475/$.
In its weekly report, Cowry Assets Management Limited noted the increased fluctuation in the official window, stating: “The naira moved within a noticeably wider trading band this week, fluctuating between N1,440 and N1,460 at the official window as softer inflows met firmer dollar demand.”
By the close of the week, the firm reported that “the currency had weakened by 0.98 per cent to close at N1,456.72 per dollar.” Cowry Assets noted that a similar trend of slight depreciation was observed in the black market, where the naira edged down by 0.20% to N1,475 per dollar.
AIICO Capital also observed the prevailing market conditions, noting that the naira “traded largely bearish in the FX market for most of the week, pressured by strong early demand from investors seeking to cover positions.”
The firm added that the strong demand overcame intervention efforts, stating: “Despite multiple CBN interventions, persistently elevated demand continued to weigh on the currency, pushing the exchange rate weaker from N1,442.43/$ at the previous week’s close to N1,456.72/$ by Friday.”
Despite the volatility in the exchange rate, Nigeria’s external reserves showed gradual improvement. Data from the Central Bank of Nigeria indicated that reserves rose from $43.64 billion on November 14 to $44.19 billion as of Thursday, representing a 1.26% increase in just a few days.
Cowry Assets Management attributed this growth in reserves to several factors, including “stable oil receipts, stronger non-oil inflows, and a sustained trade surplus, all of which reinforced the Central Bank’s ongoing efforts to maintain a firmer macro-liquidity backdrop and support overall market stability.”
Looking ahead, analysts expect the FX market to remain steady but cautious. Cowry Assets Management projected the future outlook: “The FX market is likely to maintain a cautious but steady posture, moving in line with the strength and consistency of inflows rather than speculative behaviour. Current market conditions suggest that pricing is being shaped by lighter supply rather than any fundamental shift in sentiment, meaning the naira may continue to face bouts of pressure unless inflows improve meaningfully. However, the gradual build-up in external reserves and sustained CBN interventions should provide a measure of stability, helping to temper volatility even as structural demand–supply gaps persist.”
AIICO Capital remains optimistic, noting that “The naira is expected to remain stable in the near term amidst growing external reserves.” Similarly, Afrinvest foresees some resilience, stating: “In the coming week, we expect the naira to trade in a similar band as the currency fundamentals remain bullish in the short–medium term, particularly as CBN reserves remain.”
On the broader economic front, Afrinvest analysts linked the recent currency performance to wider trends, saying: “Overall, we note that the stability of the naira (sixth consecutive monthly appreciation aided mainly by CBN’s market reforms) has played a significant role in the disinflation trend.” They, however, cautioned that “the sustainability of FX stability will depend on effective management of FPI sentiment around the controversial changes to CGT (including government consideration of the rate reduction) set to become effective in 2026.”
Ahead of this week’s Monetary Policy Committee meeting, Afrinvest suggested a cautious approach, projecting that “Given minimal risks ahead, especially following the suspension of the proposed 15.0 per cent tariff on petrol and diesel imports, we expect the positive inflation dynamics, relative FX stability, and firm GDP growth expectation (Afrinvest projection for Q3: 3.8–4.3 per cent y/y) to support a dovish call at the MPC meeting scheduled for 24–25 November.” Specifically, the firm expects “a modest 25–50 bps rate cut, which should sustain the bonds rally but with limited effect on equities.”
