The naira extended its losing streak at the official market on Monday, closing at N1,369 to the dollar, its weakest level in weeks, as pressure on Nigeria’s foreign exchange market intensified.
Despite a little decrease in the US dollar worldwide, fresh data from the Central Bank of Nigeria revealed the currency dropped from N1,361.50 noted at the end of last week. The most recent drop highlights the widening gap between Nigeria’s domestic market conditions and global currency trends.
The News Chronicle understands that ongoing demand for dollars from importers and investors, and declining foreign reserves, continue to exceed any relief from global market conditions, thereby keeping the naira under constant pressure.
Figures show that Nigeria’s reserves declined by roughly 731 million dollars in April, going from over 49 billion dollars at the beginning of the month to nearly 48.44 billion dollars. Analysts argue this fall is generating new doubts about the nation’s capacity to take consistent action in the forex market.
While global factors like rising oil prices and a weaker dollar often favor emerging market currencies, Nigeria’s structural problems, including weak dollar inflows and low liquidity, still loom as key drivers.
Although the apex bank has eased concerns over the decline in reserves, market players are closely watching to see whether the current support measures can withstand ongoing challenges. For now, the naira is in danger because demand still exceeds supply.
