Naira Softens as FX Demand Eclipses US Dollar Liquidity
The Naira depreciated slightly at the Nigerian Foreign Exchange Market (NFEM), moving from NGN1,346.2565 to NGN1,347.9435 per US dollar, a marginal depreciation of ₦1.68.
The local unit faced moderate pressure from sustained demand for foreign currency at the official window, reflecting a seasonal spike in forex payments. Although interbank FX sales eased, most trades sought to buy dollars rather than sell them to boost liquidity.
Reflecting tight US dollar volume in the official window, transactions were conducted between N1346 and N1349 during Monday’s intraday trading session.
NFEM Interbank FX turnover fell more than 63% from the previous record, settling at $21.765 million, down from $58.850 million at Friday’s close. The number of deals executed at the window dropped to 23 from 72.
The Central Bank of Nigeria (CBN) sold $950 million to authorised dealer banks at the official window last week to boost FX liquidity and keep the naira within range.
The FX market is expected to remain cautious, with the Naira’s performance largely dependent on dollar supply and demand dynamics. FX liquidity is likely to influence market activity, with the exchange rate expected to trade within prevailing levels in the near term, investment firms said.
With gross external reserves hovering around $55.2 billion, analysts said the CBN will fund the forex market rather than let the naira suffer a significant setback in 2026.
Since the authority resumed forex market intervention, the nation’s gross external reserves have declined, dropping from $55.264 billion to $55.221 billion due to 3 consecutive tranches of FX outflows. Nigeria’s 20-Year US Dollar Bond Yield Falls to 8.50%
