Naira Hits Five-Month High Amid Strong Dollar Inflows

The naira closed last week trading near a five-month high at 1514.86/$ on the official window, according to data from the Central Bank of Nigeria.

This marks a strong start to September for the local currency which opened the month at 1526.09/$ before strengthening to 1514.86/$ on Thursday at the Nigerian Foreign Exchange Market. The last time the naira appreciated below the 1515/$ mark was on March 6 when it closed at 1512.30/$ on the NFEM. At the parallel market it also firmed, gaining to 1538/$, a 0.02 per cent rise.

Analysts attribute the performance to improved liquidity and sustained dollar inflows, with the CBN intervening in the market with about $15bn. AIICO Capital noted that the FX market began the week calm with balanced flows keeping rates stable around 1527–1533/$ and no immediate need for intervention. By midweek offshore supply and opportunistic buying lifted sentiment, pushing NAFEX fixing to 1528.13/$. Momentum strengthened as the CBN injected $15m and additional portfolio flows boosted supply, driving a rally into the 1519–1523/$ range. The currency later stabilised between 1508/$ and 1529/$ before closing at 1514.8671/$.

Cowry Asset Management reported that the naira is expected to remain relatively stable in the coming week across both official and parallel markets, supported by steady dollar inflows and a modest buildup in external reserves. However, speculative demand and fluctuations in global oil prices may limit further gains. Analysts said the outcome of the OPEC+ meeting will be crucial, as production adjustments could affect Nigeria’s earnings and FX market dynamics.

Nigeria’s external reserves rose 0.10 per cent week-on-week to $41.31bn from $41.27bn, aided by stronger foreign inflows. Analysts noted that this modest increase offers a buffer against global oil volatility and currency pressures while enhancing the CBN’s ability to intervene when needed. Overall, the outlook for the naira remains stable in the near term, backed by improved dollar supply.