TUE MARCH 11 2025-theGBJournal| The official FX rate fell on Monday by 0.8% to N1,529.44/USD, reflecting the sustained FX pressures carried over from last week.
The naira fell by 1.66% in the NAFEM market week-on-week to N1,517.24/$ by close of trading Friday, driven by strong dollar demand from foreign portfolio investors (FPIs) and local corporates, despite Central Bank of Nigeria’s (CBN) $131.7 million intervention—its second-largest single-day sale this year.
In the parallel market, the Naira also depreciated, losing 4.46%, to settle at N1,570.00/US$1.
The consistent decline in value across markets highlights possible FX liquidity challenges despite the CBN’s efforts to intervene and the depletion of foreign exchange reserves over the last nine weeks.
Meanwhile, total FX inflows fell 12.9% month-on-month to $4.12 billion in February, as foreign inflows dropped 10.5% due to a 12.5% slump in FPI inflows and a 12.3% decline in FDI, while local inflows dipped 15.1%, weighed by CBN’s 36.3% cut in FX supply.
While FX inflows are expected to remain resilient, Coronation Research analysts say the moderation in yields post-rebased inflation could reduce carry trade attractiveness, potentially slowing FPI inflows and further straining CBN’s ability to stabilize liquidity.
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