The naira recorded a fresh decline at Nigeria’s official foreign exchange window last week, slipping by 0.91 per cent to close at N1,366.23 per dollar from N1,353.9, as investors reassessed risk and shifted toward safer assets.
The parallel market came under greater pressure as the local currency fell by 2.21% to approximately N1,386 per dollar. The greater disparity between the two markets indicates ongoing demand for foreign currency and tighter liquidity conditions outside the official system.
External reserves in Nigeria increased slightly to $49.97 billion from $49.83 billion, despite currency pressure. Though experts claim it may not be adequate for extended intervention by the Central Bank of Nigeria, the marginal gain implies some degree of buffer stability.
The News Chronicle gathered that, as growing geopolitical tensions have driven investors toward the US dollar, thereby strengthening it against emerging market currencies, the revived weakness of the naira is intimately linked to the world market mood. In Nigeria’s currency market, this change has exacerbated existing demand pressures.
Meanwhile, oil prices moved higher during the week, offering some support to the country’s earnings outlook. Brent crude climbed to $108.56 per barrel, while West Texas Intermediate rose to $98.38, driven by fears of supply disruptions linked to tensions in the Middle East.
