The naira recorded another week of negative trading performance as the currency weakened at both the official and parallel foreign exchange markets. At the official Nigerian Foreign Exchange Market, the naira fell by 0.99 per cent to close at ₦1,456.72/$ on Friday, down from ₦1,442.43/$ the previous week. In the parallel market, it traded weaker within the range of ₦1,470/$ to ₦1,475/$.
Cowry Assets Management Limited, in its weekly market update, said the naira “moved within a noticeably wider trading band,” fluctuating between ₦1,440 and ₦1,460 at the official window as softer inflows met stronger dollar demand. By the end of trading, the currency had weakened by 0.98 per cent to settle at ₦1,456.72 per dollar. A similar trend was reported in the black market, where it slipped marginally by 0.20 per cent to ₦1,475/$.
AIICO Capital also observed a largely bearish tone throughout the week, noting that the naira came under pressure from strong early-week demand by investors seeking to cover positions. “Despite multiple CBN interventions, persistently elevated demand continued to weigh on the currency,” the firm stated.
Despite the naira’s weakened performance, Nigeria’s external reserves continued their modest upward trend. Data from the Central Bank of Nigeria showed that reserves increased from $43.64bn on November 14 to $44.19bn as of Thursday, representing a 1.26 per cent rise in just a few days.
Cowry Assets attributed the reserve accretion to stable oil receipts, stronger non-oil inflows, and a sustained trade surplus. The firm added that these developments supported the CBN’s efforts to maintain macroeconomic stability and strengthen liquidity in the FX market.
Analysts expect the foreign exchange market to maintain a steady but cautious tone in the coming week. Cowry Assets projected that market pricing will likely continue to reflect “lighter supply rather than any major sentiment shift,” meaning the naira may still experience pressure unless inflows improve significantly.
However, they believe the steady rise in reserves and continued CBN interventions should help temper volatility even as structural gaps in supply and demand persist.
AIICO Capital maintained a positive short-term outlook, saying the naira is expected to remain stable due to the growth in external reserves.
Afrinvest echoed similar optimism, predicting that the currency will trade within a similar band next week as fundamentals remain bullish in the short to medium term. The firm linked recent naira stability—following six consecutive months of appreciation—to CBN market reforms, noting that it has helped ease inflationary pressures.
Afrinvest analysts also highlighted risks that could affect FX stability going forward, including investor sentiment surrounding the revised capital gains tax structure scheduled for 2026. They added that fiscal and trade policy clarity will remain critical.
Ahead of the Monetary Policy Committee meeting scheduled for 24–25 November, Afrinvest expects the committee to adopt a softer stance. The suspension of the proposed 15 per cent tariff on petrol and diesel imports, stable inflation trends, firm FX performance, and projected GDP growth of 3.8–4.3 per cent are key factors supporting a potential policy shift.
The firm forecasts a modest 25–50 basis points rate cut, which it says will likely sustain the bond rally while having limited impact on equities.
