The Naira closed the week on a weaker footing in the official foreign exchange market, settling at N1,444/$1 on Friday.
This is according to figures from the Central Bank of Nigeria’s (CBN) website on Friday.
The data shows that the naira struggled to maintain stability throughout the week, reflecting ongoing pressure in the FX market despite a steady rise in the nation’s foreign reserves.
The Naira opened the week at N1,437.50/$1 on Monday, before sliding to N1,440.89/$1 on Tuesday.
It recorded a sharper weakening midweek at N1,444.85/$1 on Wednesday, then slightly recovered to N1,441/$1 on Thursday, before again closing weaker at N1,444/$1 on Friday.
Week-on-Week Performance
On a week-on-week basis, the Naira posted a depreciation from the previous Friday’s closing rate of N1,438.5/$1, ending the latest week at N1,444/$1.
This represents a mild but notable weakening trend driven by persistent demand pressure, reduced FX liquidity, and speculative activities.
CBN’s data from the preceding week shows the Naira traded at N1,438/$1 on Monday, N1,441.75/$1 on Tuesday, N1,440/$1 on Wednesday, and N1,437.5/$1 on Thursday. Comparatively, this week’s daily performance reflects greater volatility and increased pressure on the currency.
Foreign reserves rise despite currency weakness
Interestingly, while the Naira came under renewed strain, Nigeria’s foreign reserves continued their upward trajectory, climbing to $43.5 billion, up from $43.32 billion the week before.
This steady improvement in external reserves may be attributed to stronger crude oil receipts, improved non-oil inflows, and tightened FX management policies by the CBN.
Analysts note that rising reserves typically bolster confidence in the CBN’s ability to intervene when necessary. However, the continued depreciation of the Naira indicates that market forces—especially demand-supply imbalances—remain a challenge.
Also, analysts suggest that unless FX supply improves significantly, the Naira may continue to face headwinds. The sustained increase in foreign reserves provides some buffer, but stabilizing the currency will require a combination of stronger export earnings, enhanced investor confidence, and consistent monetary policy actions.
Pressure piles up on the black market
The Naira equally weakened in the black market during the week. The currency traded between N1,455/$1 and N1.463/$1 during the week.
- The CBN’s managed float regime, supported by growing external reserves, has helped maintain relative stability in the Naira compared to the heightened volatility seen in previous months. However, with weakening oil prices and broader global headwinds, the slight depreciation in the official window reflects a more cautious market outlook.
- Recently, Nairametrics reported that several Bureau De Change (BDC) operators lamented that they are close to going out of operations as most of its members are struggling to stay afloat and meet up with overhead expenses.
- The currency traders have attributed this mainly to the suspension of dollar allocation by the CBN to the BDCs, as they struggle to have access to foreign exchange from the official window.
