Weekly dollar inflows jump 26.8% as naira posts fresh losses

The naira ended the week weaker in the official foreign exchange (FX) market as renewed demand for the dollar outweighed rising FX inflows and stronger external reserves.

Data from the Central Bank of Nigeria (CBN) showed that the naira depreciated by N10.47 week-on-week, with the dollar quoted at N1,380.93 on Friday at the Nigerian Foreign Exchange Market (NFEM), representing a 0.76 percent decline from N1,370.46 recorded on Friday last week.

On a day-on-day basis, the local currency closed almost flat, shedding 82 kobo from N1,380.11 per dollar traded on Thursday.

Over the five trading sessions, the naira weakened by 0.86 percent or N11.82 from its opening rate of N1,369.11 on Monday.

In the parallel market, also known as the black market, the local currency closed unchanged at N1,395 per dollar. The gap between the official and parallel market rates remained at N15, the same level recorded on Thursday.

Despite the naira’s decline, trading activity in the official market strengthened significantly. Total turnover at the NFEM rose by 26.82 percent week-on-week to $2.79 billion on Thursday, representing a $590 million increase from $2.20 billion recorded on Thursday of the previous week.

The number of deals at the NFEM, however, declined marginally by 1.12 percent to 1,241 transactions from 1,255 deals recorded a week earlier.

Activity in the interbank segment of the FX market also improved. Total turnover surged by 34.08 percent week-on-week to $635.69 million on Friday, an increase of $161.56 million from $474.13 million recorded a week earlier. The number of interbank deals rose by 3.5 percent to 555 transactions from 536 deals over the same period.

Nigeria’s external reserves, which provide the CBN with the firepower to support the naira, continued their steady ascent, rising to $51.24 billion as of June 25, 2026. This represents a 36.97 percent increase from $37.41 billion recorded during the corresponding period in 2025, according to data published on the CBN’s website.

Analysts at Comercio Partners said the naira remained notably stable throughout May 2026, with significantly lower volatility than in previous years.

According to the report, the currency traded within a relatively narrow band of N1,360 to N1,375 per dollar at the official NFEM window. It opened the month around N1,367 to N1,375 per dollar and closed near N1,372, recording only modest day-to-day fluctuations and avoiding significant depreciation pressures.

The firm attributed the relative stability to improved FX liquidity, stronger foreign exchange inflows, and timely interventions by the CBN.

It also noted that the parallel market remained closely aligned with the official market, trading between N1,390 and N1,397 per dollar, leaving a premium of only about 1 to 2 percent. According to the report, the narrow spread reflects improving market confidence and a sharp reduction in the distortions that had previously characterised the FX market.

“Overall, the naira has shown remarkable resilience since late 2024, moving from extreme volatility, with peaks above N1,600 per dollar in early 2025, to a more predictable trading range,” the report said.

Comercio Partners further noted that Nigeria’s gross external reserves staged a strong recovery during May 2026 after experiencing pressure in April.

According to the report, reserves increased by about $1.22 billion during the month to close at $49.58 billion on May 29. Reserve levels rose from $48.34 billion on May 4 to $48.89 billion by May 21 before recording further gains towards the end of the month.

“The combination of a unified, transparent FX market, naira stability and rising reserves represents a positive consolidation of reform gains. However, sustainability will depend on maintaining strong FX inflows, prudent fiscal management and avoiding renewed external pressures, including weaker global oil prices or geopolitical shocks,” the report stated.