LIFTED BY FOREX INFLOWS, NAIRA SET TO STRENGTHEN FURTHER

LIFTED BY FOREX INFLOWS, NAIRA SET TO STRENGTHEN FURTHER
According to a Reuters analysis, Nigeria’s currency the naira is expected to extend its recent gains against the U.S. dollar in the week ahead, buoyed by stronger foreign exchange inflows and active Central Bank of Nigeria (CBN) interventions that have helped narrow the gap between official and parallel market rates. Traders said the improved liquidity outlook suggests the naira is poised to stay on the front foot in foreign exchange markets.
In official FX markets, the naira was quoted at around ₦1,344 to the dollar, stronger than the ₦1,357 level seen last week. In street trading, the currency was changing hands near ₦1,385 to the dollar, reflecting a tightening differential between official and unofficial market rates as forex liquidity improves.
Market analysts attributed the expected currency resilience to several factors:

• Robust foreign exchange inflows including trade receipts, remittances and portfolio investments are boosting market liquidity.
• CBN’s targeted interventions, particularly dollar sales to licensed Bureau de Change (BDC) operators, have enhanced FX availability at the retail end and helped reduce pressure on the naira.
• Nigeria’s external reserves have reached multi‑year highs, giving the CBN stronger buffers to defend the currency and manage volatility. Traders expect these positive conditions to sustain the naira’s recent gains into the coming week, as improved FX supply and narrower market premia support a firmer exchange rate outlook. Beyond near‑term dynamics, analysts caution that continued foreign capital inflows and further enhancements in CBN liquidity management will be critical for maintaining stability. The combination of higher external reserves and improved systemic liquidity could help anchor confidence in the currency, attracting further investment flows.