The Nigerian naira ended the past week weaker at the official foreign exchange market, closing at ₦1,532.34 per dollar, despite multiple interventions by the Central Bank of Nigeria (CBN) to stabilise the market. According to trading data, the local currency depreciated by 0.14% week-on-week, highlighting persistent supply-demand imbalances in the foreign exchange (FX) market.
The naira had shown signs of strength earlier in the week, hitting a four-month high at ₦1,518.88/$ on the first trading day. However, it gradually weakened to ₦1,530.25/$, further dipped to ₦1,533.11/$, before recovering slightly to close at ₦1,532.34/$ at the end of the week.
At the parallel market, the currency traded between ₦1,535/$ and ₦1,544/$, reflecting similar volatility. The highest recorded exchange rate during the week stood at ₦1,538/$, while the lowest was ₦1,515/$, according to official data from the Nigerian Foreign Exchange Market (NFEM).
Analysts confirm that the CBN has been active in the market, selling dollars intermittently to boost liquidity and calm volatility. A report by AIICO Capital Limited revealed that early and late-week dollar sales played a role in maintaining relative stability, even though the naira still closed weaker.
The report also highlighted a positive development in Nigeria’s external reserves, which grew by $422 million within the week, moving from $37.43 billion to $37.85 billion as of Thursday. The reserves’ growth is attributed to improved oil receipts and foreign capital inflows.
Cowry Assets Management Limited noted in its weekly market review that while the naira appreciated slightly by 0.06% week-on-week at the parallel market, it remained under pressure at the official market. Analysts at the firm said the “divergent movements reflect ongoing supply-demand imbalances and the evolving FX liquidity landscape.”
Nigeria’s oil sector is expected to play a key role in the currency’s outlook. Latest figures from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) show that crude oil production (excluding condensates) rose by 3.6% in June 2025, averaging 1.51 million barrels per day (mbpd) compared to 1.45 mbpd in May. This marks the first time in five months that Nigeria met its OPEC production quota, an improvement analysts say will boost dollar inflows and strengthen external reserves.
Cowry Assets analysts expressed optimism, noting that the positive oil earnings outlook combined with steady capital inflows “should offer continued support for the naira and enhance near-term FX market stability.”
All eyes are now on the Monetary Policy Committee (MPC), which begins its meeting today. Analysts are divided on the policy direction, with some advocating for a modest interest rate cut to stimulate economic activities amid signs of moderating inflation and a more stable naira.
However, hawkish analysts warn that loosening monetary policy too soon could reverse the gains made in FX reforms, especially given persistent food supply shocks and global market risks. Comercio Partners, in a note to investors, stated, “For now, traders are positioning around the edges, but the real signal will come from the tone of the communique.”
With improved oil earnings, rising reserves, and the CBN’s active interventions, analysts expect the naira to trade within the current range in the coming week. However, the MPC’s decision and global oil price fluctuations will play crucial roles in determining whether the naira gains or loses further ground.