Naira Stays Stable as CBN Drives Half of Weekly Dollar Supply
Following trading activities at the Nigerian Foreign Exchange Market (NAFEM), the local currency edged slightly lower by 0.2%, exchanging at N1,602.63 per US dollar, up from the N1,599.93 recorded before the Easter break, based on CBN data.
In the informal market, commonly referred to as the black market, the naira held steady at N1,610 per dollar, according to figures sourced from street traders and online platforms.
According to Coronation Merchant Bank Research, NAFEM saw a sharp rise in dollar inflows, hitting $1.42 billion—an increase from $847 million in the prior week. The CBN was responsible for 50.60% of these inflows. Other contributors included non-bank corporates (25.14%), exporters (12.99%), foreign portfolio investors (8.61%), and other sources (2.66%).
The naira saw a modest 0.24% gain against the dollar in the official spot market over the previous week, closing at N1,599.93. Forward contracts reflected market expectations, with the one-month rate closing at N1,642.03, the three-month rate at N1,720.49, six-months at N1,802.37, and the one-year forward rate at N1,979.27.
As of April 16, 2025, Nigeria’s gross foreign reserves dipped by 0.39% week-on-week to $37.88 billion. The naira also weakened against the Chinese yuan, closing at N219.16 per CNY—a 0.44% drop.
Recent CBN data shows that net foreign exchange inflows into Nigeria declined by 4.4% to $4.79 billion in January 2025, compared to $5.01 billion in December 2024. Total FX inflows into the economy also saw a downturn, settling at $9.63 billion from $10.17 billion in the previous month. Outflows followed the same trend, dropping to $4.84 billion in January from December’s $5.17 billion.
The central bank attributed the fall in inflows mainly to reduced transactions via its own channels. Specifically, inflows through the CBN fell sharply to $2.33 billion in January from $4.09 billion the month before. In contrast, autonomous sources such as private sector players ramped up activity, increasing inflows to $7.31 billion from $6.08 billion.
On the outflow side, CBN-related exits declined to $3.80 billion from $4.16 billion, while independent outflows slightly rose to $1.04 billion from $1.01 billion.
This shift led to a net outflow of $1.47 billion through CBN channels in January, a significant increase from the $0.07 billion net outflow recorded in December. Meanwhile, net inflows through autonomous sources strengthened to $6.26 billion, reinforcing the growing role of non-CBN entities in Nigeria’s FX market.
In terms of currency performance, the naira showed some resilience. At the NAFEM window, it closed at N1,599 per dollar on the last Thursday of March. On the parallel market, the naira appreciated by N5 to settle at N1,605 per dollar, improving from N1,610.
Average exchange rates also saw gains in January. The naira appreciated by 1.16% to N1,535.94 per dollar, up from December’s average of N1,553.73. By month-end, the currency had strengthened further to close at N1,478.22, a 3.90% gain from N1,535.82.
The average daily FX turnover in the official market rose by 18.30% to $408.49 million in January, compared to $345.30 million in December, reflecting stronger trading activity despite the broader decline in inflows.
While external reserves declined slightly, they remained robust. At the end of January 2025, Nigeria’s reserves stood at $38.88 billion, enough to finance 8.82 months of imports of goods and services or 13.20 months of goods alone—offering a substantial cushion against external volatility.
