Over the past week, the Nigerian naira experienced a depreciation against the US dollar in both official and parallel markets.
At the official market, the naira weakened by approximately 1.66%, closing at ₦1,517.24 per dollar from ₦1,492.49 the previous week.
Similarly, in the parallel market, the naira eased to an average of ₦1,520 per dollar, reflecting a gradual uptick in demand for the greenback.
According to Bureau De Change operators, the naira weakened by approximately 1.66% week-on-week, closing at ₦1,517.24 per dollar, while In the parallel market, reports indicate that the naira lost as much as ₦70, closing at ₦1,570 per dollar, reflecting increased demand for the greenback.
AIICO Capital Limited, in its investor note, attributed the recent depreciation of the Nigerian naira to increased demand for US dollars from foreign portfolio investors and local corporations.
“The naira depreciated this week due to tight dollar liquidity and increased demand from foreign portfolio investors and local corporates,” AIICO Capital Limited said, adding that offshore demand remained strong, pushing rates higher despite interventions from the Central Bank of Nigeria.
CardinalStone, in its recent daily market report, observed that the naira faced increased pressure in the foreign exchange market “arising from profit-taking actions by foreign portfolio investors and local corporates, offsetting support from CBN’s intervention at the interbank market.”
Analysts at Cowry Assets Management Limited have emphasized the importance of the Central Bank of Nigeria’s (CBN) ongoing weekly interventions in the foreign exchange (FX) market to support the naira, noting that these actions will significantly influence currency movements.
They believe that the CBN, with foreign reserves amounting to $38.35 billion as of March 6, 2025, possesses adequate resources to provide a buffer for the naira.
“While the short-term outlook suggests a moderate market performance, an improved supply of dollars could provide some relief for the local currency,” the experts said.
