By David Akinmola
Nigeria’s currency closed the week on a fragile note as sustained foreign exchange (FX) pressures continued to weigh on the market, pushing the naira to N1,444 per dollar at the official window.
The persistent decline, traders said, was driven by weak FX supply, renewed demand from importers, and lingering uncertainties around monetary and fiscal policies. Despite recent interventions and assurances from the Central Bank of Nigeria (CBN), the market remained tight, with dollar liquidity falling short of demand.
At the Nigerian Autonomous Foreign Exchange Market (NAFEM), the naira traded within a wide intraday band as volatility persisted. Market participants noted that the currency briefly weakened beyond the closing rate before recovering marginally on late-session inflows.
On the parallel market, the naira also depreciated as speculators and retail buyers intensified demand amid concerns over future exchange rate adjustments. Dealers reported increased activity from importers seeking to hedge against possible further depreciation.
Analysts said lingering investor uncertainty, limited foreign inflows, and the slow pace of FX reforms continue to dampen confidence, despite the CBN’s ongoing efforts to stabilise the market. They warned that without stronger supply—either from oil receipts, diaspora remittances, or foreign investment—the naira may remain under pressure in the near term.
However, they added that recent policy steps, including clearing verified FX backlogs and enforcing market discipline among banks, could gradually support stability once inflows improve.
The market now awaits the CBN’s next policy direction and potential measures to bolster liquidity as the currency heads into another week of heightened volatility.
