CBN Changes Dollar Exchange Rate as Naira Weakens, New USD Prices Emerge
- Naira slips to N1,329.15 per dollar as renewed demand for international payments pressures the official foreign exchange market
- Interbank FX turnover surges 174% to $262.12 million, while parallel-market naira strengthens to N1,370 per dollar
- Nigeria’s external reserves climb to a 17-year high of $54.607 billion, strengthening the CBN’s capacity to support FX liquidity
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Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
The naira weakened against the US dollar at the official foreign exchange market as renewed demand for international payments put pressure on the local currency despite a sharp rise in market liquidity.
Data from the Nigerian Foreign Exchange Market (NFEM) showed that the naira closed at N1,329.15 per dollar, compared with N1,326.30/$ in the previous trading session.
Source: Getty Images
The movement represents a depreciation of N2.85, or about 0.21%, highlighting the continued sensitivity of the Nigerian currency to changes in dollar demand and supply.
Dollar trades as high as N1,333.50
Trading data showed that the dollar exchanged within a relatively wide range during the session, with transactions completed between N1,326/$ and N1,333.50/$.
The upper end of the range indicated pockets of demand pressure as businesses, banks and other market participants sought foreign currency to meet international obligations.
However, trading activity increased significantly, suggesting improved dollar availability compared with the previous session.
According to the Central Bank of Nigeria's daily foreign exchange update, interbank FX turnover jumped by more than 174% to $262.12 million, from $95.61 million recorded a day earlier.
The number of interbank transactions also increased to 172 deals, compared with 109 previously.
Naira strengthens at parallel market
While the naira lost ground at the official window, the picture was different in the parallel market.
The currency reportedly strengthened to about N1,370 per dollar, improving by N10 from the previously reported rate of N1,380/$.
The contrasting movements narrowed the gap between official and parallel-market rates, an important indicator watched by businesses and investors assessing Nigeria's foreign exchange market.
FX analysts believe the CBN's recent interventions and broader market reforms are helping to contain sharp currency swings, although demand for dollars remains a major factor.
Analysts at Herwood Securities Limited said the forex market could remain relatively stable in the near term, with movements largely determined by available liquidity and demand conditions.
The firm said the naira could continue recording modest fluctuations as market participants react to prevailing supply and demand dynamics.
Source: Getty Images
Nigeria's external reserves rise to $54.6bn
Providing an additional buffer for the currency market, Nigeria's gross external reserves climbed further to $54.607 billion, supported partly by stronger hydrocarbon revenues.
The reserve level is the highest recorded since 2008 and could strengthen the CBN's capacity to support liquidity in the FX market when necessary, according to a report by MarketForces Africa.
For businesses and households, however, the immediate focus remains on whether increased dollar supply can consistently match demand.
With official turnover rising sharply and reserves strengthening, traders will be watching upcoming sessions to see whether the naira can recover from its latest decline or face renewed pressure.
CBN crashes dollar as naira hits new high
Legit.ng earlier reported that the naira strengthened against the United States dollar in the official foreign exchange market after the Central Bank of Nigeria (CBN) injected fresh dollar liquidity into the system.
The local currency appreciated to N1,328.2154 per dollar at the Nigerian Foreign Exchange Market (NFEM), improving from N1,329.2129/$ recorded in the previous session.
Source: Legit.ng
