The naira slipped against the dollar across both the official and parallel forex markets, reversing early-week gains driven by renewed investor interest.
Central Bank of Nigeria (CBN) data showed the Nigerian Foreign Exchange Market (NFEM) rate declined to N1,533/$ from N1,531.95/$, the closing rate on Monday.
In the parallel market, the naira also lost ground, dropping by N5 to trade at N1,565/$ on Wednesday from N1,570/$ the previous day.
This decline contrasts with Monday’s brief rally, which had sparked optimism over a strengthening local currency amid rising capital inflows.
As of August 1, Nigeria’s foreign reserves climbed to $39.54 billion, supported by OMO bill subscriptions that attracted foreign portfolio investors seeking higher yields.
According to the National Bureau of Statistics (NBS), total capital importation in Q1 2025 reached $5.642 billion, with portfolio investment accounting for $5.204 billion, or over 92% of the total inflow, followed by other investments ($311.17 million), while foreign direct investment (FDI) stood at $126.29 million.
Naira’s Outlook
Despite the short-term depreciation, the naira’s broader outlook remains positive.
While the recent depreciation reflects short-term volatility, Nigeria’s forex market fundamentals are improving. Strong foreign portfolio participation, rising reserves, and sustained interest in OMO instruments suggest the naira could regain momentum if investor confidence holds.
However, low FDI levels remain a concern, underscoring the need for structural reforms to boost long-term capital stability.
