Naira Suffers Sharpest Fall as Dollar Scarcity Deepens in FX Market Strain
- The Nigerian currency, the naira, faced its biggest fall in the Nigerian Foreign Exchange Market
- According to reports, demand for the dollar rose sharply in the FX market despite CBN’s interventions
- The naira’s spot exchange rate touched an intraday high of N1,469.90 per dollar from the previous day’s closing level of N1,462.
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
The Nigerian naira recorded its steepest depreciation in recent weeks at the official foreign exchange window, as persistent dollar shortages intensified pressure on the local currency.
Despite renewed intervention by the Central Bank of Nigeria, demand for foreign exchange continued to outstrip supply, pushing the naira to weaker levels against the US dollar.
Source: Getty Images
Official rate records sharp decline
Market signals now point more clearly to sustained foreign exchange stress, with liquidity constraints limiting the effectiveness of regulatory support and inflows failing to calm the market.
At Friday’s trading session, the spot exchange rate touched an intraday high of N1,469.90 per dollar, marking a significant slide from the previous day’s closing level of N1,462.
This movement came even after authorities boosted dollar supply in an attempt to stabilise trading.
According to the Central Bank of Nigeria’s official update, the naira eventually closed at N1,464.4974 per dollar.
This represented a notable depreciation from the prior day’s rate of N1,457.8402, confirming the currency’s sharp day-on-day fall.
CBN intervention falls short
The apex bank contributed directly to FX supply, complemented by inflows from exporters and foreign portfolio investors. However, these measures were insufficient to offset strong demand from importers and other market participants.
Non-corporate FX inflows through commercial banks also tightened, reflecting reduced contributions from international oil companies.
These firms are increasingly cautious as uncertainty in the global oil market weighs on earnings expectations and dollar liquidity.
Oil market weakness adds pressure
Developments in the global crude oil market further complicated Nigeria’s FX outlook.
Oil prices declined during the week amid rising expectations of a possible Russia-Ukraine peace deal and speculation around eased sanctions, both of which raised concerns about potential oversupply.
Brent crude fell by 1.56% week on week to settle around $60.14 per barrel.
Notably, the market appeared largely indifferent to geopolitical tensions, including renewed conflict developments and supply disruptions, highlighting how traders have become less reactive to traditional risk signals.
Bearish outlook weighs on FX inflows
Sentiment in the oil market was further dampened by the International Energy Agency’s downward revision of its 2026 oversupply forecast, alongside expectations of weaker global demand into early 2026.
Analysts now warn that Brent crude could close the year below $60 per barrel, as steady Venezuelan exports and subdued consumption outweigh disruptions in key producing regions.
For Nigeria, softer oil prices translate into tighter FX inflows, adding pressure to an already strained currency market.
Mixed signals from commodity markets
Elsewhere in the commodities space, precious metals posted mixed performances. Gold prices softened as optimism over a potential Russia-Ukraine peace deal reduced demand for safe-haven assets.
Other precious metals, however, recorded gains as investors sought alternatives amid continued market volatility and expectations of stronger industrial demand.
Source: Getty Images
Together, these global dynamics continue to shape investor sentiment and liquidity conditions, leaving the naira vulnerable as dollar scarcity persists in the domestic market.
Dealers quote dollars at new rate
Legit.ng earlier reported that the Nigerian naira weakened further at the official foreign exchange market, with the dollar trading at higher rates despite ongoing intervention by the Central Bank of Nigeria.
The latest movement reflects sustained pressure from strong demand for foreign currency and limited supply inflows across key FX channels.
At the Nigerian Foreign Exchange Market window, the naira depreciated by 0.16% to close at ₦1,457.84 per dollar, compared with ₦1,455.49 recorded in the previous session.
Source: Legit.ng
