Key points
- The naira depreciated to N1,379.06 per dollar at the official foreign exchange market on Wednesday.
- The currency lost N3.32 compared with Tuesday’s closing rate.
- Wednesday’s decline followed a sharper loss recorded a day earlier after the naira began the week on a positive note.
- The latest movement ends the currency’s recent streak of appreciation at the official market.
Main story
The naira continued its downward trend at the official foreign exchange market on Wednesday, extending losses recorded earlier in the week after a recent period of sustained appreciation.
Figures published by the Central Bank of Nigeria (CBN) showed the local currency closed at N1,379.06 to the U.S. dollar, compared with N1,375.74 at the close of trading on Tuesday.
The latest exchange rate represents a depreciation of N3.32, or 0.24 per cent, marking the second consecutive trading session in which the naira weakened against the dollar.
The decline follows a mixed start to the week. The currency opened Monday on a stronger footing before reversing course on Tuesday with a larger loss, a trend that persisted into Wednesday’s trading.
Despite the recent pullback, the naira had enjoyed several days of gains at the official market before the current bout of depreciation interrupted that momentum.
The issues
Movements in the official exchange rate remain closely watched because they influence import costs, inflation expectations, business planning and investor confidence. Short-term fluctuations often reflect changes in foreign exchange supply and demand within the official market.
What’s being said
The Central Bank of Nigeria’s official market data showed the naira closed Wednesday at N1,379.06 per dollar, down from N1,375.74 the previous day.
What’s next
Market participants will monitor upcoming trading sessions to determine whether the recent weakening is temporary or signals a broader shift in the naira’s recent performance at the official market.
Bottom line
The naira has now posted back-to-back losses after opening the week with gains, suggesting that the currency’s recent appreciation has given way to renewed pressure in official market trading.
