CBN Policies Keep Naira Range-Bound Amid Mild Depreciation Expectations

The Nigerian Naira showed relative stability last week, despite marginal depreciation pressures from importers and fuel marketers, according to market analysts. Data from the Nigerian Foreign Exchange Market (NFEM) indicated that the Naira weakened slightly on the official window, closing between ₦1,436–₦1,437 per US dollar by November 7–10, down from around ₦1,421–₦1,422/$ at the start of the month—a decline of roughly 1–1.4 percent.

Despite this minor slide, the Central Bank of Nigeria (CBN) has maintained interventions to keep the currency within a controlled range. Analysts attribute the relative stability to the CBN’s managed float, growing foreign reserves of approximately $43 billion, and ongoing monitoring of the foreign exchange market.

The Naira exhibited greater volatility in the parallel market, where it traded between ₦1,440 and ₦1,470/$, reflecting earlier highs of nearly ₦1,485/$ in some reports. The gap between the official and parallel rates narrowed slightly, remaining between ₦10/$ and ₦30/$, amid continued demand pressures and market segmentation.

Market experts expect the Naira to remain stable with a slight bias toward depreciation in the coming week, projecting official rates between ₦1,435/$ and ₦1,450/$, while the parallel market could trade within ₦1,455/$ and ₦1,480/$. Analysts warn that year-end import demands may keep pressure on the official window despite CBN interventions.

“Long-term projections suggest a mild decline in November, averaging around ₦1,444/$, but stabilization is possible if oil prices improve or foreign reserves increase,” said a currency market analyst.

On the international front, the US Dollar Index (DXY), which tracks the greenback against six major currencies, traded at 99.65 amid expectations of a resolution to the ongoing US federal government shutdown. Senate negotiations to reopen funding for government departments have eased some market uncertainties, boosting risk appetite and putting downward pressure on the dollar.

Weak US economic indicators, including a drop in the Consumer Sentiment Index from 53.6 in October to 50.3 in November, have also contributed to speculation of a potential 25-basis point interest rate cut by the Federal Reserve in December, according to the CME FedWatch tool, which priced in a 67 percent probability of such a move.

Experts caution that, while the Fed has recently kept rates unchanged, inflation pressures and fiscal risks, including tariffs and deficits, may continue to limit significant dollar gains. “The Naira’s mild depreciation reflects both domestic FX pressures and broader global trends impacting the US dollar,” said a senior economist.

Overall, the CBN’s policy interventions have kept the Naira relatively range-bound, even as external factors and domestic demand create subtle pressures for a controlled weakening.