Revealed! Naira gains 5.7% in parallel market amid strong FX inflows

• Rising dollar inflows, peculiarly from planetary portfolio investors, helped the naira admit by 5.7% connected the achromatic marketplace and 0.8% connected the authoritative marketplace successful the archetypal fractional of 2025.
• Despite expanding overseas speech inflows, challenges specified arsenic increasing import bills and indebtedness servicing caused reserves to alteration by 8.5% to $37.3 cardinal by June 2025.
• Analysts expect the naira to stabilise astir N1,595 by the extremity of 2025, supported by favourable monetary policies and beardown autonomous inflows.

Legit.ng writer Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

Rising dollar inflows, chiefly from planetary portfolio investors, helped the naira summation N90, oregon 5.7%, connected the achromatic marketplace and 0.8% connected the authoritative overseas currency (FX) marketplace successful the archetypal fractional of 2025.

Analysts astatine FBNQuest said that FX inflows person been expanding since Q4 2023. Photo Credit: Contributor
Source: Getty Images

In opposition to the N1,541.36 quoted astatine the commencement of June, the naira gained N11.65 connected the authoritative market, closing astatine N1,529.71 connected June 30, 2025, the past trading day, according to information from the Central Bank of Nigeria (CBN).

In the parallel market, the worth of the naira accrued by N90, oregon 5.7%, from N1,660 to the dollar astatine the opening of June to N1,570 astatine the extremity of the month. Stronger overseas speech inflows and heightened marketplace assurance were reflected successful the improved exchange complaint performance.

“The gradual appreciation of the naira and the shrinking dispersed betwixt authoritative and parallel rates underscore improved assurance successful the FX market. The CBN’s FX policies and its wide argumentation absorption person reduced speculative demand, enhanced FX inflows, and weakened the inducement for rent-seeking and arbitrage,” analysts astatine FSDH Research said. They noted that the Central Bank has continued implementing reforms to heighten transparency and assurance successful the FX market.“We enactment that large risks to economical maturation and FX stableness see imaginable fiscal outflows, a little crude lipid price, and output beneath the national government’s benchmark. We support our earlier forecast that the naira volition settee astir N1,595 successful 2025,” the analysts added.

Nigeria's currency stableness and equilibrium of payments beryllium heavy connected superior flows. According to FSDH Research, investor-friendly policies and export diversification helped Nigeria pull $5.03 cardinal successful Foreign Portfolio Investments (FPIs) successful the archetypal 4th of 2025.

According to the CBN's astir caller Quarterly Statistical Bulletin, wide overseas speech inflows into the Nigerian economy accrued to $27.7 cardinal successful Q4 2024, up 17% from the erstwhile 4th and 78% from the erstwhile year.

Since Q4 2023, FX inflows person been rising, according to analysts astatine FBNQuest. The summation was mostly driven by a 38% emergence successful inflows from autonomous sources, which made up 58% of each overseas speech inflows, totaling $16.1 billion. The nett overseas speech inflow stood astatine $15.7 billion, the largest since Q3 2021, portion full overseas speech outflows accrued by 43% quarter-on-quarter to $12.1 billion.

Autonomous sources much than offset the humble 4% quarter-over-quarter diminution successful FX inflows done the CBN, which fell to $11.5 billion, with robust portfolio-driven inflows.

However, the CBN's overseas speech outflows roseate by 39% to $10.1 billion, chiefly owed to payments for different fiscal commitments and outer indebtedness servicing. During this period, the CBN received $1.4 cardinal successful nett overseas speech inflows.

Additionally, FX outflows from autarkic sources accrued from $1.1 cardinal successful Q3 2024 to $1.9 billion. Net overseas speech flows from autonomous sources grew by 34% connected a quarterly ground to $14.3 billion.

While planetary uncertainties, including changes successful U.S. monetary policy, commercialized argumentation shifts, and waning outer demand, whitethorn interaction aboriginal inflows, FBNQuest expects these autonomous inflows to stay sustained successful the adjacent aboriginal owed to favourable monetary policies.

Stronger FX inflows and heightened marketplace assurance were reflected successful the improved speech complaint performance. Photo Credit: Contributor
Source: Getty Images

Key changes astatine the CBN, specified arsenic interest complaint hikes, stricter FX policies, and the clearing of FX backlogs, contributed to the maturation of outer reserves successful 2024, according to FSDH. Between April 2024 and January 2025, reserves accrued from a debased of $32.1 cardinal to a precocious of $40.9 billion.

However, owed to unit from increasing import bills, work payments, and indebtedness servicing expenses, reserves decreased by 8.5% to $37.3 cardinal arsenic of June 27 successful the archetypal fractional of 2025.

Naira maintains unit connected dollar amid FX inflows

Legit.ng reported that the Nigerian currency has been connected an upward inclination for 5 days successful the authoritative foreign speech market owed to a operation of request and proviso favouring the section FX rate.

The Nigerian system experienced a crisp summation successful FX inflow successful the 2nd 4th arsenic overseas portfolio investors (FPIs) drove dollar measurement successful the authoritative marketplace aft successive OMO measure sales.

Data from the Central Bank of Nigeria (CBN) disclosed that connected Thursday, July 3, 2025, the Nigerian Foreign Exchange Market (NFEM) settled astatine N1,525.82 per dollar from N1,526.15 the erstwhile day.

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Source: Legit.ng