Dollar Crushes Naira Despite Central Bank’s Rescue Moves

The Nigerian Naira ended last week’s trading with a slight decline, falling by 0.14% to close at ₦1,532.34 per US dollar on the official Nigerian Foreign Exchange Market (NFEM).

Despite beginning the week strongly at ₦1,518.88/$—its highest in four months—the Naira lost ground midweek, dipping to ₦1,530.25/$, then ₦1,533.11/$, and eventually settling at ₦1,532.34/$ by Friday.

According to iReporter Online, market data revealed that the Naira traded as high as ₦1,538/$ and as low as ₦1,515/$ during the week. In the parallel market, it moved within the band of ₦1,535.00/$ to ₦1,544.00/$, reflecting minor discrepancies in the unofficial segment of the market.

Financial analysts noted that these fluctuations highlight persistent supply-demand mismatches in the forex space. Nonetheless, the Central Bank of Nigeria’s intervention and increased market liquidity were credited with offering a measure of temporary stability.

According to iReporter Online, Cowry Assets Management Limited stated in its weekly report that the divergent movements between the official and parallel markets illustrate Nigeria’s evolving FX liquidity dynamics.

Cowry Assets further maintained an optimistic outlook, citing higher oil production and rising global crude prices as key elements that may spur greater foreign exchange inflows. This, the firm believes, will aid in strengthening Nigeria’s external reserves and support naira stability.

In a related development, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) reported that crude oil output (excluding condensates) rose by 3.6% in June 2025 to 1.51 million barrels per day—marking the first time in five months that Nigeria met its OPEC production quota. This development, according to iReporter Online, is expected to enhance FX inflows and bolster the CBN’s efforts to stabilize the Naira.

Meanwhile, AIICO Capital Limited disclosed that the CBN conducted two rounds of strategic dollar sales during the week, helping to steady the currency. Foreign reserves grew by $422 million, rising from $37.43 billion to $37.85 billion within a week. AIICO noted that these interventions cushioned the naira’s depreciation, which ultimately slipped by only 13.6 basis points week-on-week.

As the Central Bank’s Monetary Policy Committee (MPC) convenes, analysts remain divided. Some recommend a cautious rate cut due to falling inflation and improving FX conditions, while others argue that premature easing could derail hard-won reforms and worsen inflation risks.

With ongoing central bank support, stronger oil earnings, and an improving FX outlook, analysts expect the Naira to hover within its current range in the short term, pending the MPC’s decision and broader global economic signals.

”IREPORTER REPORTS”