Naira Weakens as Dollar Demand Climbs
The Nigerian Naira weakened against the US dollar, depreciating by ₦2.15 to close at ₦1,338.10/US$ compared with ₦1,335.95/US$ previously recorded.
Based on data from the Central Bank of Nigeria (CBN) on Wednesday, the spot exchange rate traded within the low and high bands of ₦1,328.00/US$ and ₦1,340.00/US$, respectively.
The market expects the Naira to continue trading in line with prevailing market demand and supply dynamics, supported by an improving external reserves position
The exchange rate climbed by 0.73% to ₦1,393/$ in the parallel market, reflecting divergent currency dynamics between the regulated official segment and the informal foreign exchange market.
The local currency has been up and strong against the US dollar as the greenback faces pressure from offshore investors dumping American Treasury notes.
“The general depreciation that we’ve seen in the US dollar since Liberation Day has, however, clearly eased pressure on Africa FX and contributed to the broad rebound in the region’s currencies in the last ten months”, Matthew Ryan, CFA Head of Market Strategy at Ebury, said in a report.
The smoother FX environment has supported renewed confidence in Nigeria’s capital market. With inflation easing toward 15%, real yields have improved, drawing selective foreign portfolio inflows back into short-term securities and supporting stronger participation in fixed-income markets.
The movement from ₦1,431/$ at the start of January to ₦1,338/$ reflects a currency settling into a more stable operating band, shaped by rising reserves, firmer liquidity conditions, and a more transparent FX framework, according to PAC Capital Limited.
Analysts said while the parallel premium remains a structural feature, its narrowing underscores the progress made since the last reforms that started in 2024.
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