Nigeria’s local currency, the naira, has continued its downward trend against the US dollar, weakening across both the official foreign exchange window and the parallel market amid persistent demand for foreign currency.
Latest figures released by the Central Bank of Nigeria show that the naira closed at around ₦1,390 per dollar at the official market, reflecting a further depreciation compared to earlier trading sessions. The decline highlights the sustained pressure on the currency despite ongoing monetary and economic reforms aimed at stabilizing the foreign exchange market.
At the Nigerian Foreign Exchange Market (NFEM), the naira traded near ₦1,384 per dollar before settling at the weaker closing rate, indicating a modest but notable loss in value within a short trading period.
Parallel Market Shows Similar Pressure
The trend was mirrored in the parallel, or black market, where Bureau De Change operators reported exchange rates ranging between ₦1,360 and ₦1,380 per dollar for buying and selling transactions across major cities including Lagos, Abuja, Kano, and Port Harcourt.
Currency traders say the pressure on the naira is largely driven by strong demand for dollars, especially from importers, travelers, and businesses seeking foreign exchange for international transactions.
Persistent Volatility in Forex Market
Financial analysts note that the continued depreciation reflects broader structural challenges in Nigeria’s foreign exchange market, including supply constraints and high demand for foreign currency. The situation has led many businesses and individuals to rely on the parallel market when access to official forex remains limited.
Despite policy interventions and reforms in the financial sector, exchange rate volatility remains a key concern for investors and economic stakeholders monitoring Nigeria’s economic outlook.
Implications for Businesses and Consumers
A weaker naira typically translates to higher import costs, which may further push up prices of goods and services in the domestic market. For many businesses dependent on imported raw materials and equipment, the currency’s decline could increase operational costs and affect profitability.
Economists warn that stabilizing the currency will require increased foreign exchange inflows, stronger export earnings, and improved investor confidence in Nigeria’s economic reforms.
For now, market watchers say the naira’s movement against the dollar will remain closely watched as policymakers continue efforts to restore stability to the country’s foreign exchange system.
