Naira holds steady amid boost in Dollar supply, as market liquidity improves
The naira held its ground at the official foreign exchange (FX) market on Tuesday, buoyed by improved liquidity conditions across trading platforms.
At the close of trading, the naira strengthened marginally against the US dollar, appreciating by N5.53 to settle at N1,598.95 per dollar. This represents a 0.4 percent gain compared to Monday’s closing rate of N1,604.48 at the Nigerian Foreign Exchange Market (NFEM), according to data from the Central Bank of Nigeria (CBN).
Currency traders quoted the highest exchange rate on Tuesday at N1,605 to the dollar, a firmer position than the N1,630 recorded the previous day. The lowest rate observed on the day was N1,590, slightly better than the N1,593 figure seen on Monday.
In the parallel market, commonly referred to as the black market, the naira also posted a modest gain. The dollar was quoted at N1,610, down from N1,613 the previous day—reflecting a slight appreciation of N3.
The NAFEM trading window saw a total inflow of US$847 million this week, marking an increase from the US$795 million recorded in the previous trading week.
Breakdown of inflow sources showed that the Central Bank of Nigeria contributed 22.87 percent of the total, foreign portfolio investors (FPIs) brought in 32.26 percent, non-bank corporates added 22 percent, exporters accounted for 17.97 percent, while the remaining 4.90 percent came from other channels.
Despite the daily gains, the naira weakened by 2.35 percent on a week-on-week basis in the official spot market, ending last week at N1,603.78 to the US dollar, according to a report by Coronation Research.
In the derivatives segment, forward contract rates revealed market expectations for continued naira pressure. The 1-month forward contract closed at N1,670.42 per dollar, while the 3-month rate settled at N1,752.18. The 6-month forward contract finished at N1,870.78, and the 1-year rate closed at N2,087.66.
Meanwhile, in the parallel market, the naira showed a more positive trend. It appreciated by 3.85 percent over the week, ending Friday, 11 April 2025, at N1,620 to the dollar.
Data from the CBN also revealed a slight dip in the nation’s gross foreign reserves, which fell by 0.32 percent week-on-week to close at US$38.03 billion as of 10 April 2025.
Against the Chinese yuan, the naira lost ground, depreciating by 1.41 percent to close at N218.19 per CNY.
