Naira Trades Mixed as Banks Sell Dollars Higher, CBN Reserves Hit $42bn
- The naira performed mixed in the foreign exchange markets on Monday, September 22, 2025, despite improved inflows
- The local currency depreciated slightly in the official window and appreciated in the parallel market
- However, optimism swirled following the rise in Nigeria’s external reserves, which exceeded $42 billion
Pascal Oparada, a reporter for Legit.ng, has over ten years of experience covering technology, energy, stocks, investment, and the economy.
The Nigerian currency traded low in the Nigerian foreign exchange markets on Monday, September 22, 2025, as demand for the dollar surged in the official window.
Despite the rise in FX inflows, the naira depreciated in the Nigerian Foreign Exchange Market.
Source: Getty Images
The naira depreciates slightly at NFEM
According to data from the Central Bank of Nigeria (CBN), the official exchange rate closed at N1,488.60.17 per dollar at the official market.
Currency dealers quoted the dollar at a high of N1,492 per dollar and a low of N1,486.
The development shows that there was a slight rise in dollar demand, as the apex bank funded the supply side with $150 million last week.
Despite sufficient liquidity, the naira’s value fell against the dollar by 0.05% to N1,488 per dollar.
The naira surges in the black market
However, the local currency appreciated by 0.25% in the parallel market, closing at N1,517 per dollar as demand pressure reduced.
Amid the slight naira depreciation, experts have warned dollar holders not to hoard as the CBN moves to shore up the naira’s value.
Experts warn dollar hoarders
A prior report by Legit.ng disclosed that CBN’s renewed reforms in the foreign exchange (FX) market are driving a stronger naira and increasing external reserves.
But as the local currency continues to appreciate, a new risk is emerging: Nigerians holding dollar accounts or hoarding foreign currency may be sitting on potential losses.
CBN’s drive to stabilise the naira
Since Yemi Cardoso assumed leadership of the CBN, the apex bank has stepped up interventions in the FX market to close the gap between the official and parallel windows.
The bank appears to have set an informal trading band for the naira, stepping in when necessary to defend its value.
These actions, alongside improved investor confidence, have boosted FX liquidity and eased the chronic dollar shortages that previously weakened the currency.
Forex inflows surge
According to a report by Market Forces Africa, last week, total forex inflows into the official market rose to $605 million, from $550.90 million the previous week.
Coronation Merchant Bank's Research arm disclosed that foreign portfolio investments (FPIs) accounted for the largest contribution to the inflows at $251.70 million, representing 1.60%, followed by exporters at 19.72%.
Source: Getty Images
Non-interest corporates accounted for 13.33%, while foreign direct investments (FDIs) contributed 8.94% and CBN at 6.10%. Other sources yielded 10.32%.
External reserves rise, oil prices decline
Meanwhile, Nigeria’s gross external reserves crossed $42 billion, the highest in six years, amid crude oil price fluctuations in the global markets.
CBN data revealed that gross external reserves rose to $42.032 million as of September 19, 2025.
Amid the rise in external reserves, Brent crude posted a 1.25% drop last week as concerns persisted due to oversupply and declining demand overshadowing expectations that the first interest rate cuts by the US Federal Reserve would raise consumption.
According to reports, the benchmark crude blend hit $66.15 per barrel on Friday, September 18, 2025, down from $66.99 per barrel.
The average Brent price for the year dipped marginally to $69.81 per barrel in the previous week.
Naira breaks below N1,500 per dollar
Legit.ng earlier reported that the Nigerian currency, the naira, received a massive boost following an accretion in Nigeria’s external reserves last week.
The reserves hit their highest in six years, boosted by additional inflows from different sources.
According to reports, in September, total inflows into the reserves hit $692.28 million, CBN data shows.
Source: Legit.ng
