The Nigerian naira gained ground against the US dollar, supported by increased foreign portfolio investor (FPI) activity. Data from the Central Bank of Nigeria (CBN) platform showed the spot exchange rate rising to N1,544.62, a gain of about N5, as foreign exchange liquidity outpaced demand.
In the parallel market, the naira also strengthened by N10, closing at N1,570 per dollar. Traders await the CBN’s final decision on FX sales to Bureau de Change operators at the official rate, a program originally set to end in May.
Last week, the naira rose by N3.76 against the dollar, closing at N1,549.35 on Friday. Coronation Research attributed the appreciation to inflows from FPIs, which pushed the naira to a midweek high of N1,539.72 per dollar.
In May, the CBN injected approximately $580 million into the market to support the naira, complementing other inflows. However, the naira weakened slightly by N10 to close at N1,549.35 on Friday.
For the fourth consecutive week, FPIs led foreign exchange inflows into Nigeria’s FX market, Coronation Research reported. Analysts see the increased inflows through official channels as a sign of renewed investor confidence in the Nigerian economy.
This optimism followed the CBN’s Monetary Policy Committee meetings in late May, where the policy rate was held steady, reinforcing a recent credit rating upgrade announced in April. Non-bank corporates contributed 37.36% to inflows, exporters 23.08%, and others 0.57%.
No FX inflows were recorded from the CBN last week, likely due to the naira’s relative stability and the global weakening of the dollar amid uncertainties about US debt sustainability.
Meanwhile, investors saw a rise in their equity portfolios by N512 billion, driven by gains among heavyweight stocks.
