Nigeria’s currency maintained relative stability in the mid-N1,400s per dollar this week, even as pressure from high foreign-exchange demand persisted. In Lagos’ parallel market, traders quoted the U.S. dollar slightly higher, with the naira trading between N1,460/$ and N1,475/$, reflecting renewed depreciation in the unofficial window.
In contrast, the Nigerian Foreign Exchange Market (NFEM) recorded a stronger rate of N1,450/$, widening the gap between the two markets. Analysts note that this divergence is largely driven by significant demand for dollars from importers, as well as personal and corporate transfers conducted outside formal channels. Limited inflows into the official market have also sustained the pressure.
Despite these short-term challenges, experts maintain that the naira’s medium-term outlook remains positive.
FX Reserves Reach Seven-Year Peak
Nigeria’s foreign exchange reserves rose to $46.7 billion, marking their highest level in seven years and offering fresh support for currency stability. The buildup is linked to improved oil earnings, increased portfolio investments, and growing confidence in the country’s macroeconomic reforms.
CBN Deputy Governor for Economic Policy, Muhammad Abdullahi, speaking on behalf of Governor Olayemi Cardoso in Abuja, described the reserve milestone as a turning point in the Bank’s reform strategy. He noted that the current reserve strength is sufficient to cover over ten months of imports, underscoring improved market confidence, healthier liquidity conditions, and stronger crude oil sales.
Cardoso has previously attributed recent gains to ongoing policy adjustments designed to stabilise the exchange rate and rebuild investor trust.
Legislative Pressure on Naira-for-Crude Policy Compliance
Meanwhile, lawmakers are tightening oversight on the implementation of the Naira-for-Crude Oil Policy. The House of Representatives’ Ad-Hoc Committee on Implementation and Oversight has issued a seven-day ultimatum, ending November 27, to agencies that failed to appear before the committee or submit requested documents.
Committee chairman Hon. Boniface Emerengwa criticised the agencies for what he called “gross negligence,” stressing that their absence demonstrated a lack of seriousness toward legislative-executive collaboration. He emphasised that the committee requires full cooperation to effectively assess the policy’s impact and execution.
Dollar Index Struggles Near Key Support Level
On the global front, the U.S. Dollar Index (DXY) — which measures the dollar against six major currencies — hovered around 100.15, retreating as traders digested conflicting labour market signals and delayed economic data.
Recent U.S. employment figures showed stronger-than-expected job creation in September, but rising unemployment and downward revisions to previous months have complicated the outlook for the Federal Reserve. The mix of indicators has sparked debate over whether the Fed will consider a rate cut next month to cushion the labour market.
Adding to the uncertainty are delays in key jobs and inflation reports due to the ongoing U.S. government shutdown. Market participants are now awaiting Friday’s preliminary S&P Global PMI reading for clearer direction.
Federal Reserve officials have issued cautious guidance:
- Cleveland Fed President Beth Hammack restated her resistance to further rate cuts, citing elevated price levels.
- Philadelphia Fed President Anna Paulson said she is approaching December’s policy meeting “cautiously,” signalling a delicate balance between inflation risks and cooling labour momentum.
Outlook
With Nigeria’s reserves strengthening and FX reforms gaining traction, analysts expect the naira to find firmer footing over the coming months, though short-term volatility may persist due to elevated import demand. Globally, dollar movements will continue to hinge on U.S. economic data and the Fed’s next policy steps, shaping emerging-market FX trends, including Nigeria’s.