The naira recorded another week of downward pressure, sliding by 0.99 per cent at the official Nigerian Foreign Exchange Market to ₦1,456.72/$ on Friday, down from ₦1,442.43/$ the previous week. In the parallel market, the currency also traded weaker, fluctuating between ₦1,470/$ and ₦1,475/$.
In its weekly report, Cowry Assets Management Limited noted that the naira traded within a wider band as “softer inflows met firmer dollar demand,” adding that the local currency closed the week 0.98 per cent lower at the official window. The black-market rate similarly slipped by 0.20 per cent to ₦1,475/$.
AIICO Capital said the naira traded largely bearish throughout the week, pressured by “strong early demand from investors seeking to cover positions.” The investment firm noted that despite multiple interventions by the Central Bank of Nigeria (CBN), elevated FX demand continued to weigh on the local currency.
Meanwhile, Nigeria’s foreign reserves recorded a modest rise, climbing by 1.26 per cent within days from $43.64bn on November 14 to $44.19bn as of Thursday. Cowry Assets attributed the accretion to “stable oil receipts, stronger non-oil inflows, and a sustained trade surplus,” which have supported the CBN’s liquidity and market-stability efforts.
Looking ahead, analysts expect the FX market to remain cautious. Cowry Assets projected that pricing will continue to be influenced by “lighter supply rather than any fundamental shift in sentiment,” warning that the naira may face further pressure unless inflows improve significantly.
However, the firm noted that rising reserves and ongoing CBN interventions should help contain volatility, even as structural demand-supply gaps persist.
AIICO Capital maintained a positive short-term outlook, forecasting near-term stability for the naira. Afrinvest also expects the currency to trade within a similar band next week, citing bullish short-to-medium-term fundamentals.
Afrinvest linked recent currency performance to Nigeria’s broader macroeconomic momentum, noting that FX stability — driven largely by CBN reforms — has contributed to the country’s ongoing disinflation trend. But it warned that long-term stability will depend on managing foreign portfolio investor sentiment, particularly ahead of controversial capital gains tax adjustments set for 2026.
Ahead of the Monetary Policy Committee meeting scheduled for November 24–25, Afrinvest expects a dovish stance, forecasting a 25–50 basis point rate cut. The firm said improved inflation dynamics, FX stability, and strong GDP expectations should support a softer policy position that could sustain the rally in the bonds market, though with limited impact on equities.
