FX inflows hit $20.98bn in 10 months as CBN, FPI activity tighten spreads and steady the market…
The naira strengthened over the past week, appreciating to ₦1,446.74 per dollar, a 0.69 per cent gain from the previous week’s rate of ₦1,456.72/$. The currency’s rebound followed a period of sharp volatility, with the naira trading below ₦1,450/$ at the official window for most of the week. In the parallel market, it also improved slightly, firming by 0.07 per cent to ₦1,476/$.
Speaking at the 60th Annual Bankers’ Dinner in Lagos on Friday, the Governor of the Central Bank of Nigeria, Olayemi Cardoso, revealed that foreign capital inflows reached $20.98bn in the first ten months of 2025. This represents a 70 per cent increase over total inflows recorded in 2024 and a 428 per cent jump compared with the $3.9bn received in 2023.
Cowry Asset Management, in its weekly outlook, observed that the recent stabilisation was not due to an extraordinary surge in inflows but rather from “a deeper, more balanced two-way market interest.” The firm noted that liquidity improved, bid–offer spreads narrowed, and the FX market settled into a steadier trading band. It added that the Monetary Policy Committee’s reaffirmation of the willing-buyer, willing-seller framework helped anchor market expectations by signalling that pricing will continue to be market-driven with limited intervention.
Analysts at AIICO Capital attributed the naira’s stronger performance to increased activity by Foreign Portfolio Investors (FPIs) and CBN supply.
According to the firm, “The Nigerian naira appreciated by ₦9.98 per USD during the week, buoyed by improved foreign currency supply from FPIs who sold USD positions, boosting market liquidity and easing demand pressures. The steady inflow of foreign funds strengthened supply conditions across key benchmarks, resulting in a consistent appreciation of the naira as USD availability outpaced demand. Overall, the naira gained 0.69 per cent w/w to close at ₦1,446.74/$.”
Looking ahead, Cowry Asset Management warned that mild pressure may linger due to persistent FX demand and structural challenges. However, the firm noted that Nigeria’s rising external reserves could act as a buffer. Additional month-end inflows and a calmer post-MPC environment, it said, should support short-term stability and ensure that price discovery remains driven by genuine market dynamics rather than speculative sentiment.
Meanwhile, CBN Governor Cardoso highlighted the central bank’s ongoing FX reforms, calling them the most visible sign of renewed confidence in the Nigerian economy. He said the CBN has successfully maintained the unification of multiple exchange-rate windows over the past year and fully cleared the multibillion-dollar FX backlog that once hampered business planning.
Cardoso added that the rollout of the Nigerian Foreign Exchange Code has set clear standards for transparency, ethical conduct, and governance among authorised dealers. The deployment of the Electronic Foreign Exchange Management System, powered by Bloomberg’s BMatch platform, has also improved trading by enforcing mandatory order submissions, enhancing real-time regulatory oversight, and improving price discovery.
According to him, these measures have reduced opacity and manipulation while restoring discipline to the FX market.
“The naira now trades within a narrow, stable range. The once-substantial gap between the official and parallel markets has shrunk to under two per cent, down from over 60 per cent,” Cardoso said.
The governor reiterated that foreign capital inflows now at $20.98bn in the first ten months of 2025, underscore a clear resurgence of investor confidence in the Nigerian economy.
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