The naira recorded a negative trading performance during the week as the naira weakened by 0.99 per cent at the official Nigerian Foreign Exchange Market to 1,456.72/$ as of Friday, from 1,442.43/$ in the previous week. At the parallel market, the currency traded weaker within the range of 1,470/$ and 1,475/$.
According to Cowry Assets Management Limited in its weekly report, “The naira moved within a noticeably wider trading band this week, fluctuating between N1,440 and N1,460 at the official window as softer inflows met firmer dollar demand.” By the close of trading, “the currency had weakened by 0.98 per cent to close at N1,456.72 per dollar.” A similar movement was seen in the black market, where the naira slipped marginally by 0.20 per cent to N1,475 per dollar.
AIICO Capital also noted that the naira traded largely bearish in the FX market for most of the week, “pressured by strong early demand from investors seeking to cover positions.”
The investment house added that the pressure was sustained. “Despite multiple CBN interventions, persistently elevated demand continued to weigh on the currency, pushing the exchange rate weaker from N1,442.43/$ at the previous week’s close to N1,456.72/$ by Friday.”
Nigeria’s foreign exchange market exhibited mixed signals this past week, marked by persistent demand pressure that weakened the naira across the official and parallel windows, despite a consistent and modest increase in external reserves, which stood at $44.19bn as of Thursday.
Despite the exchange rate volatility, Nigeria’s external buffers have continued to strengthen. Data from the Central Bank of Nigeria indicated that the reserves moved from $43.64bn on 14 November to $44.19bn as of Thursday, a 1.26 per cent increase in days.
Cowry Assets explained the factors driving this increase, noting that “The accretion was supported by 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.”
Market analysts anticipate that the foreign exchange market will maintain a steady but watchful stance in the coming week, with experts at Cowry Assets Management projecting, “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’s outlook is positive, stating, “The naira is expected to remain stable in the near term amidst growing external reserves.” Afrinvest also suggests a degree of short-term resilience, expecting that “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.”
Linking the recent currency performance to broader economic trends, Afrinvest analysts said, “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.” However, the firm 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.”
The analysts also suggest a softer approach from the Monetary Policy Committee, which will be meeting this week. Afrinvest projected 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 anticipates “a modest 25–50 bps rate cut, which should sustain the bonds rally but with limited effect on equities.”
