The naira weakened against the United States dollar on Friday, closing at N1,455.50/$1 at the official foreign exchange market, as demand pressures persisted despite ongoing monetary tightening by the Central Bank of Nigeria (CBN).
Market data showed that the local currency depreciated marginally at the Nigerian Foreign Exchange Market (NFEM) compared with its previous close, reflecting sustained dollar demand from importers, manufacturers and other end-users as the trading week drew to a close.
Currency traders said the movement highlights continued liquidity constraints in the foreign exchange market, even as reforms aimed at improving price discovery and boosting inflows remain in place. While dollar supply from exporters and other sources has improved compared with earlier periods, it has yet to fully offset demand, particularly at week-end sessions.
Analysts noted that the naira’s performance this week mirrors broader market dynamics, with businesses front-loading dollar demand to meet trade obligations, while investors continue to monitor macroeconomic signals, including inflation trends, interest rate direction and external reserve levels.
At the parallel market, the naira traded within a similar band, underscoring a narrowing gap between official and street rates an outcome policymakers have identified as a key objective of ongoing foreign exchange reforms.
The CBN has reiterated its commitment to a market-driven exchange rate regime, supported by tighter monetary conditions and efforts to attract foreign portfolio and direct investment inflows. However, economists say sustained currency stability will depend on improved dollar supply, export growth and stronger confidence in the broader economy.
As markets head into the new week, participants expect the naira to remain sensitive to liquidity conditions and policy signals, with volatility likely to persist in the near term.
