The naira appreciated slightly at the official market last week, strengthening to ₦1,547 per dollar from ₦1,549, driven by continued interventions from the Central Bank of Nigeria (CBN) and rising foreign portfolio investment inflows.
The CBN injected dollars into the market to ease demand pressures, particularly from corporate buyers. Analysts also attributed the naira’s resilience to increased participation by foreign investors in the Central Bank’s Open Market Operations (OMO).
According to Cordros Capital Limited, foreign portfolio investors brought in foreign exchange to take part in the OMO auction, which is part of the CBN’s broader effort to mop up excess liquidity from the financial system.
The apex bank offered ₦600 billion in instruments with tenors of 155 and 204 days, receiving total subscriptions of ₦1.14 trillion. Ultimately, ₦1.07 trillion was allotted, with stop rates at 24.20% and 24.59%, respectively.
The naira’s 0.13% week-on-week gain at the Nigerian Foreign Exchange Market (NFEM) continues a trend of modest strengthening since the start of the month.
However, in the parallel market, the naira slipped slightly to ₦1,585 per dollar.
Looking ahead, analysts at Cowry Asset Management expect the naira to remain relatively stable, supported by ongoing CBN interventions and rising forex inflows amid ongoing reforms. Cordros Capital echoed this view, noting that the CBN is likely to continue managing market volatility through timely interventions.
Still, experts warned that external risks remain. Geopolitical tensions in the Middle East have pushed up global oil prices in recent weeks—a development that could benefit Nigeria’s oil-dependent economy but also introduce fresh volatility in global financial markets.
Despite the naira’s gains, Nigeria’s external reserves continued to decline. Data from the CBN’s website showed reserves stood at $37.71 billion as of Thursday.
Meanwhile, as inflation eased to 22.97% in May, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, met with CBN Governor Olayemi Cardoso to strengthen collaboration between fiscal and monetary authorities.
A statement by the Ministry’s Director of Information, Mohammed Manga, said the meeting focused on sustaining the current momentum to stabilise prices, boost investor confidence, and support private sector-led growth.
“The meeting underscores the Ministry’s commitment to collaborative economic management, signalling a renewed focus on driving sustainable growth and development in Nigeria,” the statement said.