The Nigerian naira is projected to remain stable and potentially gain value this week, trading between ₦1,500 and ₦1,530 against the US dollar. This expectation is driven by increasing foreign exchange liquidity, renewed investor confidence, and strategic interventions by the Central Bank of Nigeria (CBN). Last week, the naira closed at ₦1,528.56 in the official market and ₦1,530 in the parallel market, reflecting slight but consistent improvements in both spaces.
Ayokunle Olubunmi, Head of Financial Institutions Ratings at Agusto & Co., noted that several factors are currently favoring the naira, including higher liquidity levels and a modest resurgence of foreign investors on the Nigerian Exchange. He emphasized that these developments are helping the CBN build its reserves and manage delays in forex transactions more effectively. A marginal appreciation of ₦5 to ₦10 could be significant given the past years of steep depreciation.
However, Olubunmi cautioned that seasonal pressures—like end-of-month demands for school fees and summer travel—could cause temporary strain on the naira. Despite these risks, analysts remain optimistic that the currency will hold firm in the short term. Cowry Asset Management echoed similar sentiments, highlighting supportive factors like a softening U.S. dollar and increased global oil prices, which have improved Nigeria’s forex inflow.
The naira’s recent performance saw a 0.65% appreciation in the official market and a 2.29% rise in the parallel market. These gains occurred despite fluctuating oil prices, with Brent crude dropping to $68.58 per barrel amid OPEC+ policy uncertainties and tensions in the Middle East. Analysts suggest that while these external variables pose risks, they are currently offset by proactive domestic policy measures.
Still, concerns remain regarding Nigeria’s external reserves, which have declined for the seventh consecutive week—falling by $138.3 million to $37.18 billion as of July 2, 2025. Despite this, the forwards market showed growing confidence in the naira, with gains of 1.1% to 4.0% across short and long-term contracts. According to Cordros Research, while short-term stability is expected, global economic shifts could still pressure the naira in the longer run.
Source: Leadership