The Nigerian naira recorded a notable uptick last week, appreciating to 1,446.74 per dollar, a 0.69% increase from the previous week’s 1,456.72/$, according to the official exchange rate. This rise comes after a period of sharp volatility, with the naira consistently trading below 1,450/$ at the official window. On the parallel market, the currency eased slightly to N1,476 per dollar, reflecting a stabilizing trend across forex platforms.
Speaking at the 60th Annual Bankers’ Dinner in Lagos, the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, highlighted that foreign capital inflows reached $20.98 billion in the first ten months of 2025. This represents a 70% increase from total inflows in 2024 and a remarkable 428% surge compared to $3.9 billion in 2023, signaling growing investor confidence in Nigeria’s financial markets.
According to Cowry Asset Management’s weekly report, the improvement in the naira’s performance was supported by deeper, more balanced market activity. The report noted enhanced liquidity, narrower bid–offer spreads, and a more stable pricing corridor. Analysts credited the CBN’s adherence to a “willing-buyer-willing-seller” framework for anchoring market expectations and allowing foreign exchange pricing to remain largely market-driven.
Experts at AIICO Capital added that Foreign Portfolio Investors (FPIs) played a crucial role, selling USD positions that increased market liquidity and reduced demand pressures. “The steady inflow of foreign funds strengthened supply conditions, resulting in a consistent appreciation of the naira,” they said. However, they cautioned that persistent FX demand and structural imbalances could maintain mild pressure on the currency in the coming weeks, though month-end inflows and rising reserves may provide a buffer.
Governor Cardoso also emphasized the ongoing reforms transforming Nigeria’s forex market. He cited the unification of multiple exchange-rate windows, the introduction of the Nigerian Foreign Exchange Code, and the deployment of the Bloomberg-powered Electronic Foreign Exchange Management System as key measures improving transparency, discipline, and investor confidence. The gap between official and parallel markets has now narrowed to under 2%, down from more than 60%, reflecting a more stable and credible FX environment.
source: punch