Nigeria’s naira firmed to N1,465/dollar in the official foreign exchange market last week, rising on the back of robust foreign exchange (FX) inflows and a softer U.S. dollar that has eased pressure on demand. At the parallel (black) market, the local currency also enjoyed a gain, climbing approximately 3.8 percent week-on-week to around N1,460/dollar, narrowing the gap between official and parallel rates.
Analysts attribute the strengthening to three main factors: increased FX supply from offshore investors, steady remittances from the diaspora, and a moderation in speculative dollar demand. In its weekly report, AIICO Capital noted that early in the week the market opened with heavy dollar supply, which helped drive rates toward N1,475/dollar, but continued interventions and improving flows contained volatility within a N1,445–N1,468/dollar range before the naira closed at N1,465.68/dollar.
This rally took place even as global oil prices weakened. Despite crude benchmarks recording weekly losses, the naira’s performance appeared decoupled from oil price movements, underscoring the growing influence of non-oil FX inflows and market sentiment. Meanwhile, Nigeria’s external reserves continued their upward trend, rising by about USD 150.99 million to USD 42.41 billion as of October 2.
Market watchers remain cautiously optimistic. Some warn that sustaining the current strength will require consistent inflows and disciplined macroeconomic management, especially given the vulnerability to external shocks from crude price volatility. Looking ahead, firms like Cowry Assets and AIICO expect the naira to retain relative stability across FX windows, supported by central bank interventions and continued inflows—but with downside risks lurking on the horizon.
