Nigeria’s foreign exchange market showed renewed resilience in September as the naira appreciated across both the official and parallel markets, rising by 381bps and 397bps to close at ₦1,475.35/$ and ₦1,485.00/$ respectively.

This performance reflects growing investor confidence, supported by stronger inflows and consistent CBN interventions.

External reserves climbed to $42.33 billion by September 20, the highest level since 2019.

What’s Driving the Stability

The rise in reserves was mainly driven by foreign portfolio inflows, trade surpluses, and concessionary loans from the World Bank.

These inflows have helped cushion the FX market, though their sustainability remains in question.

While the CBN’s dovish stance and soft oil prices (still below the $75 benchmark) may test this stability, steady crude output above 1.5mbpd and healthy inflows keep the outlook cautiously positive.

The Bigger Picture

Investor perception continues to improve. Naira stability has eased speculative pressure, and reduced import shocks have supported inflation moderation, which now stands at 20.12%.

Equity inflows rose by 88 percent to ₦95.14 billion in August, while remittances grew by 43%, further strengthening FX supply.

However, risks such as the upcoming Eurobond maturity and volatile oil prices remain key watchpoints.

Looking Ahead

For October, we expect the naira to trade within a tight range of ₦1,490 to ₦1,500 per dollar at the official window and ₦1,495 to ₦1,510 per dollar at the parallel market.

Rising reserves, improved trade balances, and CBN interventions should continue to anchor stability.

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