Naira holds steady as FX turnover rises amid global dollar strength

The naira traded sideways against the US dollar at the Nigerian Foreign Exchange Market (NFEM) on Monday, closing at ₦1,379.65/, little changed from its opening rate of ₦1,379.62/.

Market activity was subdued, with low demand and supply keeping spot rates stable between ₦1,378 and ₦1,381/$.

According to Central Bank FX data, interbank turnover rose 21.14% to $86.14 million, compared with $71.04 million at the previous session, even as deal counts slipped to 85 from 87. Analysts said the absence of large international payment requisitions helped ease pressure on the local unit.

Coronation Merchant Bank reported that total FX inflows last week amounted to $0.97 billion, with foreign portfolio investors contributing the largest share at 30.29% ($0.29bn). Exporters and importers accounted for 30.14%, non-bank corporates 26.49%, while the Central Bank of Nigeria supplied 6.93%. Other sources made up the remaining 5.40%.

Analysts expect the naira to remain within a relatively stable band in the near term, supported by sustained inflows and CBN interventions. However, they caution that persistent underlying FX demand could keep depreciation pressures elevated.

Globally, the US dollar index strengthened as renewed energy price shocks raised inflation risks. The yield on the US 2-year Treasury note climbed to a one-year high, with swap data showing markets have almost fully priced in a September rate hike. The hawkish stance has weighed on African currencies, including the naira, even as oil prices continue to rise.

This straight economic story captures the naira’s sideways trading, the FX turnover surge, and the global dollar pressure shaping Nigeria’s currency outlook.