The naira, on Friday, maintained its recent upward trajectory, rising to N1421.73/$1 on the Nigerian Foreign Exchange Market (NFEM) from N1436.97/$1 Thursday, according to data released by the Central Bank of Nigeria (CBN). On the parallel market, the local currency weakened to N1,490 per dollar on Friday from N1,470 per dollar on Thursday.
Forex traders attribute the strengthening of the naira in recent months to factors such as subdued demand for forex, the surge in foreign portfolio inflows and improved forex supply, occasioned by improved oil output.
In their review of trading in the forex markets last week, analysts at Coronation Merchant Bank said: “The naira traded mixed during the week, as the official exchange rate appreciated by 1.19% w/w (or N17.39) to close at N1,457.96/$1.
“Meanwhile, the parallel rate weakened slightly 0.67% w/w (or N10) to N1,500/$1, narrowing the parallel-official rate premium to N14.65/$1 (from the N42.04/$1 in the prior week).
“Foreign exchange in- flows through the Nigerian Foreign Exchange Market (NFEM) improved to $1.37 bn (from $1.10 bn in the prior week).
Foreign portfolio investors (FPIs) remained the dominant source, contributing 33.52% ($460.01 mn) of total in- flows, followed by Exporters (14.92%), Non-Bank Corporates (10.76%), CBN (6.63%), and other sources (28.58%).
“On the reserves front, gross external reserves rose marginally by 0.40% w/w ($169.70 mn) to $42.87 bn (as of 24th October 2025), supported by stronger inflows and limited outflows.
“Looking ahead, the official rate is likely to re- main below the N1,500/$1 threshold, anchored on expectations of sustained FX liquidity.”
Saturday Telegraph reports that the CEO of CFG Advisory, Tilewa Adebajo, had in a statement in May this year contended that the naira should be trading below N1,000 per dollar based on current economic fundamentals.
According to him, a deeper and more transparent foreign exchange (FX) market, improved external reserves, and increased oil production support a stronger naira.
