Naira weakens slightly to ₦1,532.34/$ despite CBN efforts

The Nigerian naira ended last week on a weaker note, sliding by 0.14% week-on-week to close at ₦1,532.34 per dollar in the official Nigerian Foreign Exchange Market (NFEM), despite continued intervention by the Central Bank of Nigeria (CBN).

At the start of the week, the local currency had shown promise, appreciating to a four-month high of ₦1,518.88/$ on the first trading day.

However, it gradually lost momentum, slipping to ₦1,530.25/$ and then to ₦1,533.11/$, before closing the week slightly stronger at ₦1,532.34/$.

Throughout the week, the naira traded between a low of ₦1,515/$ and a high of ₦1,538/$ on the official market.

In the parallel market, the exchange rate fluctuated within the range of ₦1,535/$ to ₦1,544/$.

Market analysts continued to emphasize the importance of foreign exchange liquidity and CBN’s interventions in maintaining some level of stability in the naira’s value.

According to Cowry Asset Management in its weekly market update, the naira showed mixed performance across markets.

It appreciated marginally by 0.06% in the parallel market, closing at ₦1,544/$, while declining at the official window.

The firm noted that the opposing movements reflected persistent imbalances between forex supply and demand, as well as shifting liquidity dynamics.

Analysts at Cowry further observed that with oil production picking up and prices remaining strong, Nigeria could see increased dollar inflows.

This would likely boost foreign reserves and help stabilize the naira in the short term.

Backing this optimism, recent data from the Nigerian Upstream Petroleum Regulatory Commission indicated that average daily crude oil production (excluding condensates) rose to 1.51 million barrels per day (mbpd) in June 2025—up 3.6% from 1.45 mbpd in May.

This marks the first time in five months that Nigeria has met its OPEC production quota, suggesting improvements in production efficiency and security in key oil regions.

In its weekly report, AIICO Capital Limited highlighted the CBN’s timely interventions in the forex market during the week.

The firm noted that dollar sales at the beginning and end of the trading week helped moderate volatility, even though the naira still depreciated to ₦1,532.34/$.

Meanwhile, the country’s external reserves grew by $422 million, rising from $37.43 billion to $37.85 billion.

Looking ahead, analysts expect the naira to trade within its current range, supported by better liquidity conditions.

However, much will depend on the outcome of the Monetary Policy Committee (MPC) meeting scheduled to begin today (Monday).

Opinions remain divided over the MPC’s next move. Some experts advocated for a cautious interest rate cut, citing slowing inflation, naira stabilization, and early signs of policy reforms gaining traction.

Others argued that loosening policy too soon could jeopardize recent progress in exchange rate management and inflation control, particularly given ongoing food supply challenges and global economic uncertainties.

Comercio Partners, in its outlook, stated, “Markets are currently trading cautiously ahead of the MPC’s decision. The real impact will hinge on the tone and clarity of the committee’s communique.”