Nigeria’s currency came under fresh pressure last week as the naira weakened slightly against the United States dollar in both the official and parallel foreign exchange markets despite a modest increase in the country’s external reserves.
The News Chronicle reports that the official market saw the naira end the week at N1,375.46 per dollar, representing a 0.32 percent weekly drop, while the black market experienced a slight decline to about N1,370 per dollar.
The movement draws attention to the ongoing strain caused by high demand for foreign exchange and limited liquidity across the banking system.
Nigeria’s foreign reserves concurrently increased somewhat to $48.72 billion, giving some comfort to investors following the stability of the nation’s foreign exchange.
Analysts think that even with import demand and investor uncertainty still hurting the naira, the increase in reserves can help reduce volatility in major markets in the short run.
The survey also revealed lower activity in the bond market as investors remained wary following the Central Bank of Nigeria’s decision to maintain its current monetary policy stance.
Increasing yields and reduced demand for fixed-income securities mirrored broader anxieties about inflation, liquidity, and future market trends.
Simultaneously, the price of Nigeria’s Bonny Light crude fell by almost six per cent, deepening worries about the nation’s foreign exchange revenue prospects.
