The Nigerian naira weakened against the United States dollar on Wednesday, following a sharp rise in foreign currency transactions by market participants. Latest data from the Central Bank of Nigeria (CBN) showed the local unit closing at ₦1,536.73/$1 at the official foreign exchange window, as demand for the greenback intensified.
The spot exchange rate touched an intraday peak of ₦1,538.50/$1, reversing from the previous session’s high of ₦1,535.50/$1, a clear indication of mounting pressure on the market amid limited dollar inflows.
Analysts at AIICO Capital Limited, in a market note, attributed the decline in the naira’s value to rising FX demand coupled with restricted supply. According to the firm, the currency traded between ₦1,534.00/$1 and ₦1,538.50/$1, depreciating by 12 basis points at the close of trade. AIICO added that the naira is expected to maintain its current range in the near term.
At the parallel market, the exchange rate slid to ₦1,550/$1 as speculative demand persisted. However, the premium between the official and parallel markets narrowed to less than ₦20. Commercial banks continued to sell the dollar between ₦1,545 and ₦1,550/$1, reflecting relatively stable activity in the retail segment.
Meanwhile, CBN’s reserves report showed that Nigeria’s gross external reserves climbed back above $41 billion, boosted by sustained inflows from oil sales and other foreign exchange sources, despite global price fluctuations.
In the international commodities market, oil prices surged by nearly 2% on Wednesday after U.S. crude inventories recorded a sharper-than-expected drop. Brent crude futures rose by $1.02 to $66.81 per barrel, while U.S. West Texas Intermediate (WTI) increased by 95 cents to $63.30 per barrel.
Gold also strengthened as the dollar softened and traders awaited signals from the Jackson Hole Symposium. Spot gold advanced 0.9% to $3,344.37 per ounce, while U.S. gold futures rose to $3,388.50.
Market watchers predict oil prices will remain elevated as Russia confirmed continued crude exports to India despite U.S. pressure, with potential trilateral talks involving China expected soon.
