Naira Weakens to N1,355/$ as FX Pressure Mounts Amid Declining Reserves
By Enemona Samuel Endurance
The Nigerian naira came under renewed pressure in the foreign exchange market, weakening to N1,355/$ on Thursday amid persistent volatility and declining external reserves.
Data from the Central Bank of Nigeria (CBN), reviewed by The Business Bureau, showed the naira depreciated from N1,348.1/$ recorded on Wednesday.
The latest movement extends a gradual downward trend observed in recent sessions, reflecting both domestic pressures and global market dynamics.
What The Data Is Saying
Recent figures indicate a steady depreciation of the naira alongside a marginal decline in Nigeria’s external reserves, highlighting sustained pressure in the foreign exchange market.
The naira weakened to N1,355/$ on Thursday from N1,348.1/$ on Wednesday
Intraday trading ranged between N1,350/$ and N1,355.8/$, with an average rate of N1,354.19/$
Total interbank deals stood at 46, according to CBN data
A week earlier, the currency closed at N1,341.01/$, confirming a gradual depreciation trend
External reserves declined to $48.48 billion from $48.54 billion recorded earlier in the week
The decline in reserves suggests reduced capacity for sustained intervention in the FX market, reinforcing pressure on the local currency.
More Insights
Global developments have also contributed to the naira’s weakness, as rising geopolitical tensions boosted demand for the U.S. dollar.
Safe-haven demand strengthened the dollar amid stalled negotiations between the United States and Iran, while tensions around the Strait of Hormuz raised concerns about global oil supply disruptions.
The dollar index hovered around 98.82, remaining on track for a weekly gain, while other major currencies such as the euro, British pound, and Japanese yen weakened.
Emerging market currencies, including the Philippine peso, Malaysian ringgit, and Indian rupee, also recorded losses, reflecting broader global pressure.
What You Should Know
The outlook for the naira reflects a complex interplay of domestic and global factors.
While higher oil prices could support Nigeria’s foreign exchange inflows, global uncertainties and capital flow pressures may offset these gains.
Earlier this week, the naira depreciated to N1,349/$ from N1,342.5/$, reinforcing the current trend.
The Governor of the Central Bank of Nigeria, Olayemi Cardoso, has maintained that fluctuations in external reserves should not be overinterpreted.
“The focus should not be on short-term movements but on overall macroeconomic stability,” he stated.
The CBN projects that Nigeria’s external reserves could rise to $51 billion by the end of 2026 as part of its broader stabilisation strategy.
The Business Bureau analysis indicates that sustained FX stability will depend on improved dollar inflows, investor confidence, and effective monetary policy coordination.
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