The naira weakened against the US dollar amid renewed demand pressures in Nigeria’s foreign exchange (FX) market, highlighting persistent challenges in stabilising the local currency.
At the official market, the naira depreciated by 0.30%, closing at ₦1,538.55 per US dollar as demand for foreign currency outpaced supply. This marks a continued divergence between official and parallel market rates, driven by seasonal year-end demand for dollars.
Parallel market data revealed that the naira ended the day at ₦1,670 per US dollar, widening the gap between the two markets to approximately ₦132. The significant FX spread has fuelled speculative trading, creating opportunities for currency arbitrage.
Meanwhile, the Central Bank of Nigeria (CBN) reported an increase in external reserves, which reached $40.9 billion. Analysts predict further growth to $41 billion, supported by a $2 billion FX swap agreement between Nigeria and China aimed at bolstering bilateral trade.
On the global front, oil prices edged higher as Brent Crude rose by 0.97% to $73.97 per barrel, and West Texas Intermediate (WTI) increased by 1.09% to $70.38 per barrel. The rebound in oil prices follows earlier losses and reflects optimism about demand in the short term despite market uncertainties.
In addition, gold prices remained stable in light trading as investors awaited clarity on U.S. Federal Reserve interest rate policies and the impact of upcoming economic reforms.
The continued volatility in Nigeria’s FX market underlines the importance of structural reforms and effective monetary policy to achieve long-term currency stability.
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