Naira exchange rate closes week steady as FX market holds narrow range
Nigeria’s foreign exchange market ended the week on a relatively stable note, with the naira trading within a tight band against major global currencies, signalling cautious optimism among market participants despite persistent structural pressures.
At the close of trading, the naira exchange rate in the parallel market settled around ₦1,380/$, with intraday movements ranging between ₦1,380 and ₦1,400 per dollar, reflecting minimal volatility compared to earlier in the week.
Naira exchange rate shows weekend stability across major currencies
Against other major currencies, the naira maintained similar stability:
- Pound Sterling (GBP): ₦1,730 – ₦1,760
- Euro (EUR): ₦1,480 – ₦1,510
- Canadian Dollar (CAD): ₦1,000 – ₦1,030
- UAE Dirham (AED): ₦370 – ₦385
- Saudi Riyal (SAR): ₦365 – ₦380
The consistency across these currency pairs indicates that the naira exchange rate remains largely influenced by dollar liquidity conditions, as most global currencies track movements in the US dollar.
Demand pressures persist despite stable naira exchange rate
Market analysts say that while the naira exchange rate appears stable at the weekend close, underlying demand pressures remain significant.
Foreign exchange demand continues to come from importers, students paying tuition abroad, medical travel expenses, and international business obligations. This sustained demand has kept the naira from appreciating despite ongoing reforms.
At the same time, FX inflows remain relatively moderate, with limited participation from foreign investors and fluctuating diaspora remittances.
CBN reforms support gradual market confidence
Efforts by the Central Bank of Nigeria to stabilise the FX market are gradually influencing sentiment.
Policies aimed at improving transparency and unifying exchange rates have helped reduce arbitrage opportunities and improve price discovery.
However, traders note that liquidity constraints still limit the extent of naira appreciation, keeping the currency within its current band.
The naira exchange rate trend observed at the weekend close reflects a market balancing reform-driven confidence with persistent supply shortages.
Oil prices and external inflows remain key drivers
The performance of the naira continues to be closely tied to global oil prices and Nigeria’s export earnings. With crude oil prices showing moderate strength, there is cautious optimism that increased inflows could support the currency in the coming weeks.
Nevertheless, analysts warn that production challenges and revenue leakages could dampen the potential impact of higher oil prices on the naira exchange rate.
Outlook: Narrow band trading expected
Looking ahead, experts project that the naira exchange rate may continue to trade within the ₦1,350 to ₦1,420 per dollar range in the short term, barring any major policy shifts or external shocks.
The weekend close suggests a period of consolidation, where the market is adjusting to recent reforms while awaiting stronger liquidity injections.
For now, the naira exchange rate remains stable but fragile, reflecting a broader FX market still in transition.
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