April 17, 2025
Despite improved fundamentals in the country’s official market the Nigeria naira showed weakness during midweek trading at the unofficial market,
The naira traded at in the black market for N1,620 to $1, compared to N1,605 to $1 the previous day due to increased pressure.
Activity in the market indicated that the naira spot value appears stronger than traders had projected in the forward market, despite improvements in market liquidity and a weaker U.S. dollar index globally.
Traders in the foreign exchange market are optimistic despite this minor decline in exchange rates. There was inflow of $847 million through the NAFEM window, up from $795 million the previous week,
The Central Bank of Nigeria CBN accounted for 22.87% of the total inflow, followed by Foreign Portfolio Investors, FPIs, at 32.26%, non-bank corporates at 22.0%, exporters at 17.97%, and other sources at 40.9%.
READ MORE; Naira Depreciates As Trump Tariffs Threaten Global Markets.
Increased demand pressure on the naira during this volatile period, drove the initial market tensions though this was eased by ongoing naira for crude policy.
The closing price for the one-month forward rate was N1,670.42/$1. The three-month forward contract closed at N1,752.18/$1. The six-month forward contract settled at N1,870.78/$1, while the one-year forward rate closed at N2,087.66/$1.
Ongoing trade tensions between the United States and China, along with concerns about a potential global recession, have negatively impacted the crude oil market, which typically has a positive correlation with the naira’s outlook.
Crude oil prices currently sit approximately $10 below the Federal Government’s benchmark. Although the dollar recovered slightly from a seven-month low against the yen, it appears poised to record its fourth consecutive weekly decline as investors pull back from the U.S. in response to tariffs imposed under the Trump administration.
