Naira

The naira weakened slightly against the dollar last week, closing at ₦1,532.34/$ at the Nigerian Foreign Exchange Market (NFEM), despite continued interventions by the Central Bank of Nigeria (CBN) and improvements in market liquidity.

Data from the official window showed that the currency depreciated by 0.14 percent week-on-week. Although the naira started the week on a strong note—appreciating to a four-month high of ₦1,518.88/$—it later slipped to ₦1,530.25/$ and ₦1,533.11/$ before settling at ₦1,532.34/$ by Friday. The local currency traded within a range of ₦1,515/$ to ₦1,538/$ during the week.

At the parallel market, the naira showed marginal strength, gaining 0.06 percent to trade between ₦1,535.00/$ and ₦1,544.00/$ by the end of the week.

In its weekly market analysis, Cowry Assets Management attributed the naira’s performance to persistent supply-demand imbalances and an evolving liquidity environment in the FX market. The firm, however, expressed optimism about the currency’s outlook, citing improved oil production and prices as potential drivers of increased dollar inflows and foreign reserves.

“The positive oil earnings outlook, combined with steady capital inflows, should offer continued support for the naira and enhance near-term FX market stability,” Cowry analysts stated.

Supporting this outlook, data from the Nigerian Upstream Petroleum Regulatory Commission revealed that average daily crude oil production (excluding condensates) rose by 3.6 percent to 1.51 million barrels per day (mbpd) in June 2025, up from 1.45 mbpd in May. This marks the first time in five months that Nigeria has met its OPEC production quota, driven by enhanced security and operational efficiency.

AIICO Capital, in its own market report, highlighted intermittent interventions by the CBN during the week, noting that dollar sales helped maintain relative calm in the market.

“The naira closed at ₦1,532.34/$, down 13.6 basis points week-on-week. Reserves rose by $422 million to $37.85 billion as of Thursday, from $37.43 billion in the previous week,” the report stated.

Looking ahead, analysts expect the naira to remain within its current range, bolstered by improved liquidity. However, attention is now focused on the outcome of the Monetary Policy Committee (MPC) meeting, which begins today.

Opinions are split on the MPC’s next move. While some economists advocate for a modest rate cut, citing slowing inflation and naira stability, others caution against easing too soon, warning it could reverse recent FX gains amid ongoing global risks and food supply concerns.