The naira experienced sustained pressure across foreign exchange markets this week, closing at N1,544.50/$1 on the official market and trading as high as N1,647/$1 in the parallel market.
On Friday, January 10, 2025, the naira closed at N1,544.50/$1 on the Central Bank of Nigeria (CBN) currency tracker, a slight decline from Thursday’s closing rate of N1,542.00/$1.
In the parallel market, the situation was significantly worse, with the naira trading between N1,645.00/$1 and N1,647.00/$1, according to data obtained by Nairametrics.
This disparity continues to demonstrate the challenges of dollar accessibility for businesses and individuals.
The CBN data further reveals that the naira began the week on a stronger note, opening at N1,530.00/$1 on Monday, January 6, 2025.
However, it experienced persistent downward pressure, reaching its weakest point of N1,548.00/$1 midweek before recovering slightly to close at N1,544.50/$1 by Friday.
More insights
Between Thursday and Friday, the naira recorded an intraday high and low average of N1,543/$1, according to the Central Bank of Nigeria (CBN) data.
- This marked a decline from the N1,533.75/$1 average recorded on Monday, January 6, 2025, when the naira began the trading week on a relatively stronger footing.
- In the Nigerian Foreign Exchange Market (NFEM), the naira closed at N1,542.0256/$1 on Friday, representing a drop from the opening rate of N1,533.6065/$1 at the start of the week.
- The steady depreciation further demonstrates mounting pressures on Nigeria’s foreign exchange reserves and the widening gap between supply and demand for dollars in the market, observers suggest.
- The parallel market reflected a more volatile and dire situation, with the naira trading between N1,645.00/$1 and N1,647.00/$1 on Friday.
- Throughout the week, the parallel market experienced sharp fluctuations, driven by surging demand for dollars by importers and speculative traders.
Market sources noted that the significant volatility in the parallel market is fuelled by lingering uncertainties about Nigeria’s foreign exchange policy and continued dollar scarcity
CBN’s Policy Interventions Yet to Yield Results
- In June 2023, the CBN directed Deposit Money Banks to remove the rate cap on the naira at the Investor’s and Exporters’ (I&E) Window of the foreign exchange market, to allow for a free float of the national currency against the dollar and other global currencies.
- The development came after President Bola Tinubu promised to unify the nation’s multiple exchange rates.
- Despite several interventions by the CBN, including regular dollar auctions and restrictions on foreign currency spending, the naira has struggled to stabilize.
