Naira Starts New Week Low Against US Dollar Despite Rise in FX Reserves
- The naira started the new week on a weak note, even though the country’s foreign reserves continued to increase
- In the official market, the naira depreciated by 0.07%, while black market traders are quoting higher dollar rates
- The naira is expected to bounce back this week as CBN reserves rise further, now at a six-year high
Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The naira is opening the new week on a negative note after falling against the US Dollar at the Nigerian Foreign Exchange Market (NFEM) on Friday, November 14, following renewed pressure from increased foreign exchange demand typical for this period ahead of the festive season.
Source: Getty Images
Data obtained from the Central Bank of Nigeria revealed that the Nigerian currency in the official market closed at N1,442.43/$1 on Friday.
This is a 99 Kobo or 0.07% decline from Thursday’s rate of N1,441.44/$1.
Naira vs pound, euro
The Nigerian currency was unchanged against the pound sterling at N1,898.96/£1, but depreciated against the euro, settling at N1,678.56/€1 compared with N1,674.96/€1 recorded a day earlier.
While GTBank’s FX window opened on Monday at N1,446/$1, activity in the parallel market, also known as the black market, showed mild demand pressure, traders told Legit.ng.
Abdullahi, a BDC operator, said:
“In the parallel market, we received some Dollar demand, but the rate remained unchanged at N1,455/$1 on Friday. However, this morning (Monday), I have seen a slight increase to N1,460/$1. Bulk buyers can still get the old rate.”
Source: Getty Images
Forex reserves and inflow
Meanwhile, market data showed that forex inflows have slowed in recent weeks, dropping from a high of $1.37 billion to $899 million, a development analysts say may have contributed to the naira's performance.
The Central Bank of Nigeria’s interventions have also been less frequent, but last week it intervened with $50 million.
Despite the currency’s dip, Nigeria’s external reserves maintained their upward climb.
New data shows that the reserves stood at $43.5 billion as of Thursday, up from $43.32 billion the previous week.
The steady build-up has been linked to stronger crude oil revenue, improved non-oil inflows, and tighter FX measures introduced by the Central Bank of Nigeria.
Traders and analysts expect that the strengthening reserves could ease pressure on the naira in the coming days if demand stabilises.
Bank predicts naira to dollar exchange rate
Earlier, Legit.ng reported that the naira is projected to weaken to between N1,650 and N1,700 in mid-2026, due to expected pressure driven by lower crude oil prices and a new monetary easing cycle.
This is the view of David Cowan, Citibank African economist.
Citi’s African economist, David Cowan, linked the outlook to the CBN’s expected monetary easing and a possible decline in crude oil prices
Proofreading by James Ojo, copy editor at Legit.ng.
Source: Legit.ng
