Naira Falls to ₦1,444/$1 as FX Pressure Intensifies Despite Rising Reserves
The Naira closed the week weaker at ₦1,444 per dollar in the official foreign exchange market, according to data released on the Central Bank of Nigeria’s (CBN) website on Friday. The currency struggled for stability throughout the week, reflecting persistent pressure in the FX market even as Nigeria’s foreign reserves continued to climb.
Naira’s Daily Performance: A Volatile Trading Week
The local currency opened the week at ₦1,437.50/$1 on Monday, before slipping to ₦1,440.89/$1 on Tuesday.
By midweek, the Naira dropped further to ₦1,444.85/$1 on Wednesday, then staged a mild rebound to ₦1,441/$1 on Thursday, before weakening again to ₦1,444/$1 on Friday, its lowest level of the week.
Week-on-Week: Slight Depreciation Amid Market Imbalance
On a week-on-week basis, the Naira depreciated from the previous Friday’s closing rate of ₦1,438.5/$1, ending this week at ₦1,444/$1.
The decline, though marginal, highlights a continued weakening trend driven by:
- Persistent demand for FX
- Reduced liquidity in the official market
- Speculative trading behavior
Compared to last week’s relatively narrower movements—₦1,438/$1 (Monday), ₦1,441.75/$1 (Tuesday), ₦1,440/$1 (Wednesday), and ₦1,437.5/$1 (Thursday)—this week showed greater volatility and sustained downward pressure.
Foreign Reserves Rise to $43.5 Billion
Despite the weaker Naira, Nigeria’s foreign reserves recorded another boost, rising to $43.5 billion, up from $43.32 billion the previous week.
Analysts attribute the steady increase to:
- Improved crude oil earnings
- Stronger non-oil inflows
- CBN’s reinforced FX management measures
Rising reserves typically signal stronger capacity for intervention, but the continued depreciation shows that demand-supply imbalances remain a key challenge.
Experts warn that without a significant addition to FX supply—through stronger exports, capital inflows, and investor confidence—the Naira may continue to face short-term headwinds.
Black Market Mirrors Official Market Weakness
The Naira also slid in the parallel market, trading between ₦1,455/$1 and ₦1,463/$1 during the week.
Bureau De Change (BDC) operators report increasingly difficult business conditions, saying many are at risk of shutting down due to the CBN’s continued suspension of dollar allocations to their sector.
Without access to official FX sources, BDCs struggle to meet customer demand, contributing to widening market gaps.
Outlook: Cautious Sentiment as Global and Local Pressures Persist
While the CBN’s managed float system and rising reserves have helped prevent extreme volatility, factors such as weaker oil prices, limited FX inflows, and global economic uncertainty continue to weigh on the Naira.
Market analysts expect the currency to remain under pressure unless Nigeria boosts FX supply through stronger exports, increased investor participation, and consistent monetary policy actions.
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