Naira Gains 1.46% in August as FX Inflows Rise to $5.2 Billion
The average exchange rate improved to N1,353.41 per dollar, driven by a 19% surge in official market inflows.
Key points
- The naira strengthened by 1.46% in August to an average of N1,353.41 per dollar.
- Official foreign exchange inflows reached $5.2 billion, a 19% month-on-month increase.
- Market turnover rose to $14.45 billion, though the trading range widened by 31.56%.
The naira appreciated by 1.46% in August, reaching an average of N1,353.41 per dollar. This marks the second consecutive month of improvement for the domestic currency.
Foreign exchange inflows into the official market rose to $5.2 billion. This level represents a 19% increase from July and the highest since October 2025.
Official market inflows reach new high
NFEM inflows jumped 54% year-on-year to $5.2 billion in August. Market operators cite stronger foreign portfolio investment and exporter receipts for this gain.
Total market turnover increased by 13.8% to $14.45 billion. Average daily trading volume also rose to $760.43 million from $551.77 million in July.
Volatility widens despite monthly gains
The currency traded within a N29.60 range during August. This band was 31.56% wider than the N22.50 range observed in July.
Analysts warn that this wider band indicates persistent two-way movement. The appreciation does not eliminate underlying dollar demand pressures or volatility.
Reserves support currency stability outlook
Rising foreign exchange reserves provide additional support for external payments. Centrum Finance notes that underlying dollar demand remains a key factor for businesses.
The Guardian Nigeria News reports that improved liquidity helps investors repatriate funds. Companies may see lower costs for imported raw materials and machinery.
