The naira posted a stronger performance last week, appreciating to 1,446.74/$ a 0.69 per cent rise from the previous week’s rate of 1,456.72/$.

This improvement followed the sharp volatility seen earlier. For the majority of the week, the naira traded below 1,450/$ at the official window, while in the parallel market it firmed slightly by 0.07 per cent to N1,476 per dollar.

At the 60th Annual Bankers’ Dinner in Lagos on Friday, the CBN Governor, Olayemi Cardoso, disclosed that foreign capital inflows hit $20.98bn in the first ten months of 2025, representing a 70 per cent increase over the total for 2024 and a remarkable 428 per cent surge from the $3.9bn recorded in 2023.

According to Cowry Asset Management’s weekly update, there was no sudden jump in inflows, but rather “the emergence of deeper, more balanced two-way interest. Liquidity improved, bid–offer spreads narrowed, and the market appeared to settle into a more stable pricing corridor.

The MPC’s reaffirmation of the willing-buyer-willing-seller framework also helped anchor expectations, signalling that FX pricing will remain largely market-driven with minimal direct intervention.”

Analysts at AIICO Capital linked the naira’s performance to the actions of Foreign Portfolio Investors and the CBN’s supply interventions.

“The Nigerian naira appreciated by N9.98 per USD during the week, buoyed by improved foreign currency supply from Foreign Portfolio Investors who sold USD positions, boosting market liquidity and easing demand pressures.

The steady inflow of foreign funds strengthened supply conditions across key benchmarks, resulting in a consistent appreciation of the naira as USD availability outpaced demand. Overall, the naira gained 0.69 per cent w/w to close at N1,446.74/$,” the analysts stated.

On the market’s outlook, Cowry Asset Management noted that “Looking ahead, the naira may still experience mild pressure as persistent FX demand and lingering structural imbalances continue to shape the market.

However, the steady uptick in external reserves should provide a buffer.

“Month-end inflows are also expected to add short-term support, while the calmer post-MPC environment reduces uncertainty and allows price discovery to remain driven by genuine market dynamics rather than reactive sentiment.”

Meanwhile, the CBN Governor underscored significant reforms in the foreign exchange market.

He noted, “Perhaps the most visible sign of renewed confidence in our economy is the transformation of the foreign exchange market. Over the past year, we have sustained the unification of the multiple exchange-rate windows. Today, the once-crippling multi-billion-dollar FX backlog has been fully cleared, restoring credibility and giving businesses the confidence to plan.

“The introduction of the Nigerian Foreign Exchange Code has established clear rules for transparency, ethics, governance, and fair dealing among authorised dealers, while the deployment of the Electronic Foreign Exchange Management System powered by Bloomberg BMatch has transformed FX trading through mandatory order submission, real-time regulatory visibility, and enhanced price discovery.”

Cardoso emphasized that these reforms have curtailed opacity and manipulation while strengthening discipline in the market.

“The naira now trades within a narrow, stable range. The once-substantial gap between the official and parallel markets has shrunk to under two per cent, down from over 60 per cent.

Foreign capital inflows reached $20.98bn in the first ten months of 2025, a 70 per cent increase over total inflows for 2024 and a 428 per cent surge compared with the $3.9bn recorded in 2023, reflecting a clear resurgence in investor confidence,” he added.

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