Market News

ByTemitope Adebayo

The naira recorded a mild but persistent depreciation across the trading week, weakening at the official window as foreign exchange demand consistently outpaced supply in the Nigerian Foreign Exchange Market.

Data from the Central Bank of Nigeria showed the local currency opened the week on Monday at N1,353.91 per dollar and gradually lost ground through Friday, closing at N1,358.44. The steady decline reflects sustained pressure from importers and offshore payment obligations.

Within the week, the naira traded within a relatively wide band, hitting an intraday high of N1,354 and a low of N1,361.50 per dollar, underscoring heightened volatility and tight FX liquidity conditions.

Turnover in the official market showed some improvement during the week, with transactions rising to $43.56 million in 68 deals toward the end of the period, compared with $28.12 million recorded earlier in the week. Despite this increase, liquidity levels remained insufficient to fully meet demand.

Across the five trading sessions, demand pressures were largely driven by invisible transactions, including school fees, medical bills and travel allowances, as well as corporate obligations. Market participants noted that these demand components continued to outweigh inflows, keeping the naira on the back foot.

External conditions also offered limited support. Oil prices softened during the week, weakening Nigeria’s FX inflow outlook. Brent crude declined to around $104.83 per barrel, while West Texas Intermediate dropped to $93.90, amid easing geopolitical tensions and expectations of renewed diplomatic engagement with Iran.

The softer oil price environment adds to existing concerns over FX supply, given Nigeria’s dependence on crude oil exports for foreign exchange earnings.

Overall, the week’s performance highlights the fragile balance in the FX market, where incremental improvements in liquidity are yet to fully offset entrenched demand pressures.

Going into the new week, analysts expect the naira to remain under pressure in the near term, with stability hinging on stronger FX inflows, improved oil receipts, and sustained policy interventions by the monetary authorities.