Week Ending: Sunday, November 30, 2025
The Naira posted strong appreciation this week, gaining approximately 2.5% to close at ₦1,421.73 per dollar on the official NFEM window—marking the strongest level in 2025.
This strength was driven by improved FX supply from oil receipts and remittances, rising external reserves, and the CBN’s accommodative monetary policy stance following September’s rate cut.
Exchange Rate Summary
Official Market (NFEM/NAFEX)
- USD/NGN: ₦1,421.73 (+2.5% appreciation week-over-week)
- Achievement: Naira hits 2025 peak level
Parallel Market
- USD: Mid-₦1,400s to ₦1,460 range
- EUR: ₦1,680 – ₦1,730
- GBP: ₦1,900 – ₦2,000
Note: Material gap between formal and informal windows persists, indicating market segmentation and selective access.
Key Drivers
FX Supply Surge (Primary Driver)
- Higher oil receipts flowing into the formal market
- Stronger diaspora remittances support the supply
- Rising external reserves are improving confidence
- Exporters are increasingly using the formal NAFEX window
CBN Policy Support
- September rate cut (25-50 bps), creating an accommodative stance
- Lower short-term yields are reducing speculative pressure
- Enhanced market infrastructure via NAFEX/EFEMS fixing
- Improved FMDQ/CBN transparency, reducing arbitrage
Oil Market Context
- Global oil prices softened YTD amid higher OPEC+ supply
- Current levels moderate but haven’t reversed FX inflows
- Persistent weakness represents downside risk
Outlook: Next Week
Base Case
Near-term stability with modest appreciation bias
Expected Range
- Official NFEM: ₦1,400 – ₦1,470 per dollar
Key Conditions
- Oil receipts remain steady
- Exporters continue placing FX in the formal market
- Reserve levels maintained or improved
Critical Watch Points
- Oil Prices – Sharp declines would reduce FX inflows
- CBN Operations – Fresh liquidity measures or guidance changes
- Import/Remittance Data – Weekly flow patterns
- Reserve Trends – Any weakening would pressure the naira
Risk Scenario
Sharp oil price falls or reserve weakness could re-widen the parallel market spread and trigger depreciation pressure.
Summary
The naira’s 2.5% weekly gain to ₦1,421.73 marks a significant milestone, driven by improved fundamentals and effective policy support. The combination of stronger FX supply, rising reserves, and accommodative monetary policy has created favorable conditions.
However, the persistent official-to-parallel spread and oil price vulnerability remain key risks to monitor.
Data Sources: CBN, FMDQ/NAFEX, Reuters, Punch Nigeria, BusinessDay, Proshare
