The Nigerian Naira experienced significant depreciation against major global currencies on Thursday, November 27, 2025, as escalating end-of-year foreign exchange demand continues to mount pressure on the local currency.
Official Market Performance
According to data from the Nigerian Foreign Exchange Market (NAFEM), the Naira weakened by 99 Kobo or 0.07 percent to close at N1,443.91 per dollar, compared to the previous day's rate of N1,442.92/$1. This decline represents the latest in a series of depreciations as the festive season approaches.
The currency pressure extended beyond the US dollar to other major currency pairs. Against the British pound sterling, the Naira lost N6.50 to finish at N1,913.03/£1, down from N1,906.53/£1 recorded on Wednesday. Similarly, the European euro gained ground against the Naira, with the local currency slipping by N3.02 to end at N1,670.90/€1 compared to the previous rate of N1,667.88/€1.
Retail and Parallel Market Impact
The depreciation trend mirrored across retail market segments, with major commercial banks adjusting their rates accordingly. At GTBank's foreign exchange counter, the Naira depreciated by N1 to close at N1,447/$1, up from N1,446/$1 recorded a day earlier.
The parallel market witnessed even steeper declines, according to market operators. Abdullahi, a Bureau de Change operator, confirmed to Legit.ng that the Naira fell by N8 in the unofficial market. "Demand is picking up fast," Abdullahi reported. "We're buying dollars at 1,453 and selling at 1,468. Pounds go for N1,900 to N1,930, and euros are trading between N1,650 and N1,680."
Drivers of the Currency Pressure
Financial market analysts attribute the sustained pressure to increased foreign exchange demand as Nigeria enters December, traditionally one of the busiest months for importers and retailers. Businesses across manufacturing, fast-moving consumer goods, and general merchandise sectors are actively boosting inventories ahead of the Christmas and New Year sales boom.
Additionally, numerous corporations are completing annual supply contracts between November and December, leading to a significant spike in demand for dollars to settle foreign obligations. This heightened demand coincides with a period of tapering FX inflows into the official market, compelling the Central Bank of Nigeria to intervene with new stabilization measures last week.
Although specific details of the CBN's intervention remain undisclosed, market traders indicate that the apex bank has intensified oversight and supply injections to ensure orderly market conditions.
Silver Lining in External Reserves
Despite the current volatility, economic analysts maintain optimism about the CBN's capacity to manage short-term fluctuations. Nigeria's external reserves have climbed to $46.7 billion, supported by multiple positive factors including stronger non-oil export receipts, improved oil production volumes, increased diaspora remittances, and growing portfolio investment inflows.
The reserves buildup enhances the Central Bank's firepower to intervene in the foreign exchange market and stabilize the Naira during periods of intense demand pressure.
Traders anticipate continued pressure through December but expect incoming remittance flows to gradually ease the strain on the local currency as the month progresses.
In a related development, the cost of importing goods into Nigeria is set to decrease further following the Central Bank's reduction of the customs duty rate to N1,421.23 per dollar. This new rate marks a significant drop from the previous N1,487.396/$1 recorded on Tuesday, October 7, demonstrating the Naira's recovering strength in certain market segments.
The CBN's 2024 directive mandates the Nigeria Customs Service and other relevant parties to use the closing foreign exchange rate on the day a Form M is opened for import transactions as the standard for calculating import duties, providing more predictability for importers.
