Naira may weaken next week on fuel importer demand
Traders expect Nigeria's naira to weaken against the U.S. dollar over the coming week, driven by foreign-currency buying from fuel importers building inventories, even as the currency has recently strengthened on improved dollar liquidity. Ghana's cedi and Uganda's shilling face similar downside pressure, Reuters reported from Accra on July 23.
Key Takeaways
- Africa FX traders see the naira, Ghana cedi and Uganda shilling softer versus the dollar into next Thursday.
- Fuel importers' dollar purchases are cited as the main near-term risk for the naira.
- Official and parallel rates still showed fresh naira gains into July 24, with reserves near a 17-year high.
- Kenya's shilling and Zambia's kwacha are expected to stay broadly stable.
The Africa FX outlook lands amid a mixed local picture: Reuters traders flag near-term naira softness, while Nigerian market reports show the currency extending gains on stronger dollar supply. For ongoing market alerts, see BlasterPost's Fintech & Crypto Alerts hub.
Why do traders expect the naira to fall?
According to a Reuters Africa FX roundup dated July 23, Nigeria's naira is seen weakening largely because fuel importers are buying foreign currency to build inventories.
One trader told Reuters downside risks are skewed toward depreciation as those importers front-load dollar purchases. On the official market that Thursday, the unit was quoted around 1,368 per dollar, versus about 1,383 a week earlier. Street trading was around 1,420 per dollar.
Has the naira already been strengthening?
Yes, in the days around that Reuters survey. BusinessDay, citing Central Bank of Nigeria data, said the naira appreciated by N1.87 on Thursday to close at N1,367.76 per dollar on the Nigerian Foreign Exchange Market, from N1,369.63 on Wednesday.
Daily Post Nigeria reported a further official move on Friday, July 24, to N1,362.09 per dollar, a day-to-day gain of N5.67. Week-on-week, it said the naira appreciated by N18.19 officially and by N15 on the parallel market.
Parallel rates were choppier midweek. BusinessDay said the black market weakened by N7 to N1,407 per dollar on Thursday from N1,400, widening the official-parallel spread to 2.93% from 1.8%. Daily Post then cited a Bureau de Change operator in Abuja's Wuse Zone 4 saying Friday's parallel rate strengthened by N10 to N1,410 from N1,420.
What else is supporting or pressuring African FX?
Nigeria's external reserves remained elevated, rising to a 17-year high of $52.03 billion as of July 22, BusinessDay reported, with Daily Post putting reserves at $52.02 billion as of July 23. Coronation Merchant Bank analysts said the naira showed greater H1 2026 resilience than expected, averaging about N1,365/$ versus a projected H1 average of N1,382/$, helped by FX liquidity, stronger reserves, recovering oil output and foreign capital inflows.
Elsewhere in the Reuters survey, Ghana's cedi was under pressure from corporate dollar demand that outstripped supply, with LSEG data showing 11.61 per dollar versus 11.50 a week earlier. Uganda's shilling was forecast to extend losses as Middle East conflict lifted crude prices, quoted at 3,735/3,745 versus 3,685/3,695 a week earlier. Zambia's kwacha and Kenya's shilling were seen broadly stable on copper support and balanced conditions, respectively.
Bottom line for the naira: recent liquidity and reserve strength have underpinned appreciation, but fuel-importer dollar demand is the risk traders are watching for a possible pullback next week.