Dollar Appreciates as Naira Dips to N1,457 Amid Decline in FX Inflows
- On Monday, October 13, 2025, the Nigerian currency, the naira, dipped to a new low in the FX market
- The development followed renewed dollar demands, causing new volatility in the foreign exchange market
- Reports said that foreign exchange inflows into the FX market dipped by 5.5% in September amid CBN’s interventions
Pascal Oparada, a reporter for Legit.ng, has over ten years of experience covering technology, energy, stocks, investment, and the economy.
The naira weakened against the US dollar on Monday, slipping by 0.16% to close at ₦1,457.51/$ at the Nigerian Foreign Exchange Market.
The decline reflects increased demand for the greenback and a drop in foreign exchange inflows, signalling renewed pressure on Nigeria’s currency after a brief period of recovery.
Source: Getty Images
Last week’s gains fade
The Central Bank of Nigeria’s latest data showed reduced dollar liquidity on the supply side, leading to a tighter forex market. Traders attributed the movement to strong import demand and slower inflows from oil and non-oil sources.
Just last week, the naira had shown signs of strength, closing at ₦1,455.17/$ on Friday amid improved inflows and market confidence.
Analysts said the rally was supported by CBN interventions and steady portfolio and remittance inflows, which temporarily eased demand pressure.
Market Forces Africa reported that the country’s external reserves rose to $42.59 billion, reflecting higher receipts from crude oil sales and foreign investments.
Economists noted that this gave the apex bank “more headroom to stabilise the naira and manage short-term volatility.”
Behind the naira’s slide is a decline in foreign exchange inflows in September.
US dollar inflows into the Nigerian Foreign Exchange Market (NFEM) fell by 5.7% in September to $3.18 billion, down from $3.37 billion in August.
Data cited by Cordros Capital Limited revealed that while foreign investments into equities and bonds remained strong, the overall decline was driven largely by weaker inflows from local sources.
However, analysts remained optimistic on the naira’s resurgence, stating that it will end 2025 on a positive note.
“For now, no need to panic because the reserves are strong enough to support months of imports and FX withdrawals,” Osas Igho, a financial analyst, said.
According to him, there are predictions about the naira ending the year stronger at N1,400 per dollar.
Global oil market adds new risks
However, developments in the global oil market have dampened optimism. Following a ceasefire between Israel and Hamas, oil prices fell sharply as geopolitical risks eased and supply fears faded.
Brent crude dropped to $64.90 per barrel, while WTI settled at $61.28, with analysts citing concerns about oversupply as OPEC relaxed production cuts.
Nigeria’s Bonny Light also declined by 4.66% to $69.94 per barrel, raising worries over reduced export earnings and fiscal pressures for Africa’s biggest oil producer.
Analysts urge caution despite CBN support
Market watchers say the naira’s short-term outlook remains broadly stable, supported by steady reserves and the CBN’s consistent interventions.
But they warn that rising import demand, slower inflows, or persistent low oil prices could trigger fresh volatility.
“CBN still has some firepower to stabilise the naira in the near term,” one Lagos-based forex analyst said.
“But if global oil prices keep sliding or dollar inflows weaken further, the local currency could face renewed downward pressure.”
Outlook: Stability or a new slide?
For now, the naira remains within a narrow trading range, but the balance could shift quickly if external conditions worsen.
Source: Getty Images
With global investors staying cautious amid oil price uncertainty, Nigeria’s currency stability depends heavily on sustained inflows and prudent policy management by the CBN.
Investors return as confidence floods the market
Legit.ng earlier reported that after three days of sustained depreciation, the naira bounced back against the US dollar on Wednesday, October 8, buoyed by renewed foreign investor confidence and an improved supply of foreign exchange.
At the Nigerian Foreign Exchange Market (NFEM), the local currency gained 0.03% to close at ₦1,470.62 per dollar, compared to ₦1,475 recorded earlier in the week.
The naira also appreciated at the parallel market, rising 0.12% to close at ₦1,492, narrowing the gap between official and street rates to about ₦20.
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Source: Legit.ng
