The naira closed last week on a weaker note across Nigeria’s foreign exchange markets, as supply shortages and persistent demand pressures weighed on the local currency. Both the official and parallel segments recorded declines, reflecting ongoing challenges in stabilizing the exchange rate.
At the Nigerian Autonomous Foreign Exchange Market (NAFEM), the naira fell to N1,421.63 per dollar from N1,417.94 the previous week. Meanwhile, the parallel market mirrored this trend, with rates sliding to N1,487.00 per dollar. Analysts attribute the decline to an imbalance between limited FX supply and high market demand.
AIICO Capital reported that trading during the week was volatile within a narrow range, largely shaped by supply-demand gaps. “The naira weakened early in the week as demand outpaced available supply but staged a modest recovery midweek with improved liquidity,” the firm said, noting that by week’s end, the currency had depreciated by 26 basis points, or N3.68, due to weaker supply levels.
Despite currency pressures, external reserves offered a silver lining. AIICO highlighted that Nigeria’s reserves rose by $111.17 million to $46.01 billion, providing some buffer against short-term market stress. Cowry Assets Management also confirmed this improvement, pointing to steady oil receipts, stronger non-oil inflows, and a trade surplus as key factors supporting the reserves.
Looking ahead, analysts remain cautious. Both AIICO and Cowry forecast the naira to stay under pressure in the near term, although steady inflows and rising external reserves may offer limited support. Market watchers expect that FX supply conditions and liquidity will continue to dictate exchange rate movements in the coming week.
source: punch