The Nigerian naira closed the week of July 21st, 2025, weaker against the US dollar, depreciating by 0.14% to ₦1,532.34/$ at the official Nigerian Foreign Exchange Market (NFEM). Despite starting strong at a four-month high of ₦1,518.88/$, the naira experienced fluctuating performance midweek, dropping to as low as ₦1,533.11/$ before slightly recovering. The parallel market also reflected instability, with trading ranging between ₦1,535/$ and ₦1,544/$.
Market analysts have noted that the Central Bank of Nigeria’s (CBN) intermittent interventions and improved foreign exchange liquidity are crucial in managing naira volatility. Cowry Assets Management highlighted mixed market movements—while the naira appreciated slightly at the parallel market, it ended in decline at the official window. The firm emphasized that ongoing supply-demand mismatches and the fragile FX liquidity structure are contributing to erratic exchange rates.
Optimism for the naira’s future stability stems partly from a rebound in oil production. According to the Nigerian Upstream Petroleum Regulatory Commission, Nigeria’s average daily crude oil output rose to 1.51 million barrels per day in June, meeting its OPEC quota for the first time in five months. This improvement is expected to bring in higher dollar inflows, aiding FX reserves and supporting the naira’s strength in the medium term.
AIICO Capital reported that the CBN’s dollar sales early and late in the week helped maintain a semblance of stability. Foreign reserves grew by $422 million to $37.85 billion, suggesting that recent gains from oil exports and cautious FX management have bolstered Nigeria’s financial buffer. This reserve growth is a positive signal for sustaining the naira’s resilience amid external pressures.
Looking ahead, the market anticipates the Monetary Policy Committee’s (MPC) meeting, which could influence the naira’s direction. Opinions are divided: while some economists advocate for a rate cut due to declining inflation and FX stabilization, others warn that easing too soon could reverse the gains from recent reforms. Traders are waiting for clear signals from the MPC’s communique, which will determine the tone for monetary and FX policy in the coming weeks.
Source: Punch