Market News

• CBN injects $250m; naira dips 0.1% w/w • Reserves hit $45.44bn

By Chinwendu Obienyi

Dollar demand in Nigeria’s foreign exchange (FX) market has risen as year-end “Detty December” spending intensified, exerting mild pressure on the naira despite sustained interventions by the Central Bank of Nigeria (CBN) and rising external reserves.

>span class="s1">Data from the apex bank showed that Nigeria’s gross external reserves increased for the 25th consecutive week, rising by $396.84 million to $45.44 billion as of December 11, reinforcing investor confidence and strengthening the country’s external buffers.

In the forwards market, the naira rates depreciated across the 1-month (-0.4 per cent to N1,485.97/$1), 3-month (-0.5 per cent to N1,536.28/$1), and 6-month (-0.9 per cent to N1,599.70/$1) contracts, while it appreciated on the 1-year (+0.3 per cent to N1,726.89/$1) contract.

Market analysts attributed the renewed pressure on the naira to seasonal dollar demand associated with holiday-related imports, increased international travel and year-end corporate settlements, a trend typically observed during the festive period popularly referred to as “Detty December.”

A report by the Financial Markets Dealers Association (FMDA) research unit noted that while December often sees heightened FX demand, it could also provide support for the naira through improved foreign-currency inflows. The report highlighted increased diaspora remittances, inbound travel and tourism spending as factors expected to enhance FX liquidity and exert mild appreciation pressure on the currency later in the month.

External factors, including a stronger US dollar amid renewed US–China trade tensions and tariff expectations, further compounded pressure on emerging market currencies, including the naira.

In the parallel market, the naira weakened to N1,476/$1 by late November from N1,456/$1 in October, leading to a slight widening of the premium between the official and parallel market rates. However, analysts noted that convergence between the two markets remains relatively narrow, supported by steady diaspora remittances and moderated import demand.

CBN data show that the naira appreciated by 14.93 per cent to N1,445.39/$1 on December 2, 2025, from N1,661.12/$1 a year earlier. Nevertheless, analysts cautioned that the sustainability of the naira’s current stability remains fragile, given Nigeria’s structural external sector weaknesses and continued volatility in global oil markets, the country’s primary source of foreign exchange.

“The global environment remains supportive of net capital inflows amid ongoing global monetary easing and reduced geopolitical tensions, while a positive current account position and rising external reserves continue to underpin investor confidence.

Furthermore, the pace of growth in goods import demand remains relatively slow, helping to contain demand pressures. Therefore, we expect the naira to remain broadly stable over the near to medium term, driven by strong net FX liquidity”, analysts at Cordros Research said.