The naira exchange rate has weakened, now trading at ₦1,675 per US dollar in the official foreign exchange (FX) market as liquidity issues worsen. Data from the FMDQ platform showed a 2.72% depreciation, with the naira closing at ₦1,675.49 per dollar.
Nigeria’s efforts to build up external reserves continue as the country seeks a $750 million loan disbursement from the World Bank. This is part of a larger $2.25 billion loan package the government recently secured.
Throughout the month, the exchange rate has remained under pressure due to an ongoing imbalance between the high demand for US dollars and limited supply. Officials have downplayed the impact of the depreciating naira, though it has pushed Nigeria’s “misery index” to historic highs in Africa’s most populous nation.
Some fintech platforms have reportedly started quoting rates around ₦1,800 per dollar for certain online FX transactions, according to checks by MarketForces Africa.
Amid these challenges, many banks have stopped allowing customers to use debit cards for dollar transactions, resulting in multiple exchange rates across the market. The Central Bank of Nigeria (CBN) has been working to unify these rates, but the situation resembles the experience under former CBN Governor Godwin Emefiele, indicating that achieving convergence may be difficult.
The CBN has been selling foreign currency to authorized dealer banks to boost liquidity in the official market. However, it seems to have pulled back from its retail Dutch auction system, reintroduced in August 2024, as no new auction sales have taken place since the initial attempt. Analysts say these interventions have had limited impact on stabilizing exchange rates.
MarketForces Africa also reported that on Thursday, the naira traded at ₦1,726 per dollar in the parallel market, compared to ₦1,730 earlier that morning. This narrowed the gap between the official and parallel market rates to ₦51 due to negative rate movement in Nigeria’s autonomous FX market.
Looking ahead, Nigeria is considering issuing a diaspora bond in the United States next year, aiming to bring in $1 billion a month in remittances, according to the central bank governor.
Meanwhile, oil prices rose in the global market, with Brent Crude up by 1.07% to $72.9 per barrel and WTI increasing 1.29%, closing at $69.5 per barrel.
