Naira strengthens as dollar demand moderates

Nigeria’s Naira strengthened by 9.64 percent despite a decline in dollar liquidity at the official market on Monday.

At the close of trading on Monday, the dollar was quoted at N837.77, stronger than N927.19 quoted on Friday at the Autonomous Foreign Exchange Market (NAFEM), data from the FMDQ indicated.

The naira appreciation followed a moderation in dollar demand at the official foreign exchange (FX) market.

Willing buyers and willing sellers quoted dollars at a bid rate of N1,021, stronger than N1,160/$1 offered on Friday as the higher bid rate on the spot trading. The lower bid rate remained steady at N701 per dollar on the spot.

Dollar supply decreased on Monday as the daily foreign exchange market turnover dropped by 32.87 percent to $73.93 million from $110.14 million recorded on Friday.

In its equity research note, FSDH research acknowledged the recent pickup in activities at the NAFEM following increasingly attractive interest rates in the money market, which could entice trade investors to bring investments into Nigeria.

For context, post-FX reforms, the average NAFEM turnover is $114.8mn, up 5.2 percent from the pre-FX reform average. In addition, the report stated that the average NAFEM turnover for November was $140.9mn, showing some form of resurgence.

However, it remains below pre-Covid peak levels of about $250mn, which is the level that indicates renewed foreign investor interest in Nigeria’s capital market instruments.

“As a result, while the November resurgence was impressive, we deem it inadequate to sustain prolonged foreign investor interest in Nigerian equities. Ultimately, stable oil prices around $60 – $70/bbl. And prolonged crude oil production at >1.7mbpd will be needed to generate adequate FX inflows and strengthen external reserves, which would then attract much-needed Foreign Portfolio Investment inflows,” analysts at FSDH research said.

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.