Naira Falls at Informal FX Segment over Dollar Shortage
The naira weakened against the US dollar, trading at N1,420 per dollar in the informal foreign exchange market as of Thursday. Over the past 24 hours, the local currency has lost N5, underscoring a significant dollar shortage and escalating demand for foreign payments.
Leading Bureau de Change operators are quoting the exchange rate at N1,420, with some even demanding up to N1,425 in Lagos and Abuja. This clear upward trend is driven by constrained dollar supply.
The Central Bank of Nigeria (CBN) has deliberately scaled back its foreign exchange interventions since the naira’s previous rebound, allowing market dynamics to play a more prominent role.
Moreover, the ongoing U.S.-Iran conflict has intensified demand for the dollar, propelling the dollar index upward while other major currencies have experienced notable declines since the conflict erupted.
Despite strong expectations that instability in the Middle East would boost Nigeria’s foreign exchange income, the country’s gross external reserves have plunged for several consecutive days.
At the official exchange window, the naira also depreciated against the US dollar on Wednesday, with the spot rate declining by ₦4.07 to close at ₦1,386.70 per dollar. Nigeria’s external reserves have now fallen to $49.57 billion as a result of foreign exchange settlements. CBN Reaffirms Oversight on Union Bank after Court Judgement
