The naira on Friday recorded a marginal depreciation, closing the week at N1,456.72 despite the support of strong external reserves and improved foreign exchange inflows.
Data published by the Central Bank of Nigeria (CBN) showed that the naira weakened by N14.29 or 0.98 percent week-on-week at the Nigerian Foreign Exchange Market (NFEM) window, compared with the rate of N1,442.43 quoted last Friday. The performance underscored a slight increase in demand for dollars in the foreign exchange market even as external buffers strengthened.
Throughout the five trading days, the local currency maintained a mixed trajectory. From Monday’s opening rate of N1,448.03 at the NFEM, the naira slipped by 0.6 percent to close at N1,456.72 on Friday. On a day-to-day basis, the naira also weakened by 0.3 percent or N4.59 compared with Thursday’s closing rate of N1,452.13. This run of marginal losses highlighted pockets of pressure on FX demand despite improvements in foreign currency availability.
In the parallel market, also referred to as the black market, the naira similarly recorded mild depreciation. The currency closed at N1,462 on Friday, slightly weaker than the N1,455 it exchanged for at the beginning of the week. The parallel market movement reflected lingering retail-level demand pressures even as official market liquidity improved.
Nigeria’s external reserves, however, continued to provide a strong buffer for the currency. The reserves rose by $650 million week-on-week to $44.18 billion as of November 20, 2025, up from $43.53 billion on November 13, according to data published by the CBN. The steady rise in reserves reinforced the CBN’s capacity to support the market and underscored the positive impact of inflows from various sources.
A report by United Capital Plc also highlighted the strength of Nigeria’s reserve position. The firm noted that external reserves increased to $43.19 billion as of October 31, 2025, from $42.41 billion on October 2. According to the investment group, this improvement was supported by a steady rise in foreign exchange inflows into the country. The reserves, now providing over eight months of import cover, have boosted confidence in Nigeria’s external buffers and, according to the report, could positively influence both the exchange rate and investor sentiment.
United Capital further observed that the exchange rate appreciated during October. The naira opened the month at N1,455 per dollar and strengthened to close at N1,422 per dollar. The average exchange rate for the month was N1,455.54 per dollar, compared with N1,497.79 recorded in September, reflecting a gain of N38.25 per dollar. The report, however, noted that the naira experienced brief depreciation in early November following statements related to insecurity, although the federal government has since ramped up efforts to reinforce the country’s security architecture.
Within the week under review, trading in the official foreign exchange market remained largely stable as Nigeria’s external reserves climbed further to $46.7 billion. This increase was driven by proceeds from the federal government’s Eurobond issuance as well as the strongest FX inflows recorded in six months. The improved reserve position, analysts say, contributed significantly to the stability observed in the official market, even as the naira faced moderate downward pressure.
The firming up of reserves was largely attributed to rising FX inflows, renewed interest from foreign portfolio investors and the inflows associated with the Eurobond issuance.
October 2025 marked the highest FX inflow month since May, bolstered by improving macroeconomic stability and increasing appetite from offshore investors looking to take advantage of opportunities in Africa’s largest economy.
Data from FMDQ supported this trend, showing that total FX inflows surged by 91 percent month-on-month to reach $6.1 billion in October, the highest level since the $6.7 billion recorded in May. Analysts note that the sharp rise in inflows reflects growing confidence in Nigeria’s economic outlook, supported by stronger external buffers, improved investor sentiment, and a widening global search for higher yields.