Naira Appreciates to 1,446.74/$ as Capital Inflows Hit $20.98bn

The naira recorded a stronger performance last week, appreciating to 1,446.74 per dollar, representing a 0.69 per cent gain from the previous week’s rate of 1,456.72/$. The currency traded largely below 1,450/$ at the official window, while at the parallel market it slightly strengthened to N1,476/$.

The positive trend followed a week of sharp volatility, with analysts noting improved stability at both market ends as liquidity conditions deepened and bid–offer spreads narrowed across trading sessions.

At the 60th Annual Bankers’ Dinner in Lagos, CBN Governor Olayemi Cardoso disclosed that foreign capital inflows reached $20.98bn between January and October 2025 a 70 per cent rise over total inflows for 2024 and a 428 per cent increase from the $3.9bn recorded in 2023.

He stated that the rising inflows reflect renewed investor confidence and a more transparent FX market framework, driven by clearer monetary signals and improved price discovery mechanisms.

Both Cowry Asset Management and AIICO Capital, in their separate reports, highlighted the role of Foreign Portfolio Investors and sustained FX supply in strengthening the naira throughout the week.

“The Nigerian naira appreciated by N9.98 per USD during the week, buoyed by improved foreign currency supply from Foreign Portfolio Investors who sold USD positions, boosting market liquidity and easing demand pressures,” analysts at AIICO Capital said.

Cowry Asset Management added that liquidity improved with deeper two-way interest, while the MPC’s reaffirmation of the willing-buyer-willing-seller framework helped anchor market expectations and ensured minimal direct intervention.

Looking ahead, analysts predict that the naira may still face mild pressure due to persistent FX demand and structural challenges, but note that rising external reserves and expected month-end inflows should provide short-term support and maintain a more stable pricing environment.