The naira weakened at the official foreign exchange market last week, closing at N1,358.44 to the dollar, as pressure mounted on Nigeria’s external position and reserve levels declined.
While external reserves fell to 48.48 billion dollars, indicating constant pressure from sustained Central Bank of Nigeria interventions and great demand for foreign exchange, data indicated the currency lost over one per cent against the dollar.
The parallel market followed the pattern, with the naira exchanging around N1,370 against the dollar.
Demand from importers, producers, and foreign investors outstrips supply, which drives the apex bank to sustain consistent market support—a measure that is progressively depleting the reserve buffer of the nation.
Market analysts say the condition brings into sharper focus liquidity problems, as limited dollar inflows and rising costs, including debt servicing, intensify the strain.
Additionally, increasing worry about whether the present support measures will be maintained if inflows stay stagnant.
Simultaneously, rising global oil prices offer Nigeria’s foreign exchange earnings a possible lifeline.
Stronger inflows, increased investor confidence, and constant oil revenue performance in the weeks ahead are all necessary for any significant recovery in the naira.
For now, the local currency remains exposed to both domestic and global headwinds.
