Naira Weakens to N1,375/$ Amid Rising FX Pressure Despite $48.72bn External Reserves
The Naira weakened to N1,375.46 per dollar in the official market last week, marking a 0.32% decline as pressure from foreign exchange demand continued to weigh on Nigeria’s currency, even with rising external reserves. The parallel market also mirrored this trend, with the naira slipping slightly to N1,370/$, showing persistent alignment across both FX channels.
Market movements reflected ongoing tension between strong dollar demand and efforts by authorities to stabilize the currency. Despite tighter monetary conditions introduced by the Central Bank of Nigeria, liquidity challenges, import-related FX demand, and shifting investor sentiment continued to shape trading patterns across the market.
On the positive side, Nigeria’s external reserves edged higher to $48.72 billion, offering some reassurance about the country’s external position. Although the increase was marginal, it signals a steady inflow of foreign currency and provides a buffer that could help reduce sharp volatility in the foreign exchange market in the short term.
In the broader macroeconomic environment, Nigeria’s Bonny Light crude fell by 5.99% to $116.92 per barrel, reflecting global oil pricing fluctuations. This development adds another layer of pressure to foreign exchange stability, given the country’s reliance on crude oil earnings for FX inflows and fiscal support.
Meanwhile, the domestic fixed-income market closed the week on a bearish note, as investors reacted cautiously to the monetary policy stance of the Central Bank of Nigeria. Bond yields rose by 17 basis points to 16.28%, signaling weak demand, tighter liquidity conditions, and a defensive investment approach amid ongoing economic uncertainty.
source: The Guardian