Naira gains across markets as FPIs, non-bank corporates drive dollar inflows

The naira appreciated across various foreign exchange (FX) market segments on Monday, supported by dollar inflows from Foreign Portfolio Investors (FPIs) and non-bank corporates, despite a drop in liquidity.

At the close of trading on June’s first business day, the local currency closed at N1,581.58 per dollar at the Nigerian Foreign Exchange Market (NFEM), gaining N4.57 or 0.3 percent from the N1,586.15 per dollar it closed at on Friday, May 30, according to data from the Central Bank of Nigeria (CBN).

A market update released by Coronation Merchant Bank’s research department showed that total inflows at the NFEM dropped to $1.04 billion last week, compared to the previous week’s $4.42 billion. Despite the decline, FPIs and non-bank corporates dominated inflows. FPIs contributed 32.02 percent of total inflows, non-bank corporates 29.49 percent, while the CBN accounted for 19.71 percent. Exporters brought in 18.33 percent, and other sources accounted for the remaining 0.45 percent.

The gross external reserves declined by 0.24 percent on a week-on-week basis, closing at $38.46 billion as of May 29, 2025. In contrast to its performance against the dollar, the naira weakened slightly against the Chinese Yuan (CNY), losing 0.14 percent to settle at N220.26 per CNY.

In the official spot market last week, the naira had depreciated by 0.36 percent, ending the week at N1,586.15 per dollar. Forward contract rates also showed varying expectations for future value. The one-month forward rate closed at N1,621.61 per dollar, while the three-month forward contract stood at N1,681.37 per dollar. The six-month contract ended at N1,767.48 per dollar, and the one-year forward rate was priced at N1,936.39 per dollar.

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In the parallel market, the exchange rate held steady, with the naira closing flat at N1,620.00 per dollar on Friday, mirroring the previous day’s level.

The official FX market saw the naira end May 2025 on a relatively strong note, appreciating by N16.03 over the month. On May 2, the local currency opened at N1,602.18 per dollar and strengthened to N1,586.15 per dollar by month-end, reflecting a 1.01 percent monthly gain, which coincided with a moderate improvement in external reserves.

However, the situation differed in the parallel market. Over the same period, the naira lost ground, depreciating by N15 or 0.9 percent, falling from N1,605 per dollar at the beginning of May to N1,620 per dollar at month-end.

The contrasting performance of the naira between the official and parallel markets underscores the persistent volatility and segmentation in Nigeria’s FX environment.

Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.