The Nigerian naira concluded the first trading week of December on a weaker note against the United States dollar, succumbing to heightened demand for foreign exchange driven by festive-season spending.
Naira's Weekly Decline Against the Dollar
Data from the Central Bank of Nigeria (CBN) revealed a reversal of the currency's recent gains, highlighting the persistent pressures within the foreign exchange market. The naira closed at N1,454 to one US dollar on Friday, December 6, 2025.
A detailed look at the official trading window shows a gradual depreciation throughout the week. The currency opened on Monday at N1,450.01/$1, firmed marginally to N1,447/$1 on Tuesday, then slipped to N1,447.5/$1 on Wednesday. The downward pressure increased on Thursday with a rate of N1,449/$1, culminating in Friday's weaker close.
Parallel Market Rates and Trader Insights
The situation was more pronounced in the parallel market. Traders in Lagos reported that the naira traded between N1,469.5 and N1,472 to the dollar during the week.
Abdullahi, a forex trader in Lagos, provided his trading rates to Legit.ng. He stated that he bought the US dollar at N1,475 and sold at N1,490. For other major currencies, he purchased the British Pound Sterling at N1,965 (selling at N1,990) and the Euro at N1,690 (selling at N1,725).
This week's performance marks a shift from the previous week, where the naira showed modest strength, closing at N1,446.9/$1. Financial analysts attribute the current reversal primarily to increased dollar purchases by importers, traders, and holiday shoppers ahead of the Christmas and New Year celebrations.
Foreign Reserves Rise Offers a Glimmer of Hope
In a potentially positive development, Nigeria's external reserves saw a slight increase. According to the latest CBN figures, the reserves rose to $45.04 billion from $44.9 billion at the start of the week.
This growth, which may stem from improved oil revenues, external borrowing, or multilateral inflows, could provide the Central Bank with additional firepower to intervene in the FX market to stabilize the naira if necessary.
The outlook for the local currency in the coming weeks remains closely tied to the levels of dollar inflows, overall market liquidity, and the trajectory of festive spending.
Snapshot of Other Exchange Rates (as per CBN):
- Euro: N1,689.17
- Pounds Sterling: N1,935.45
- Yuan/Renminbi: N205.12
- CFA: N2.56
- South African Rand: N85.67
Meanwhile, economist Bismark Rewane, CEO of Financial Derivatives Company Limited, has projected that the naira could close at N1,492/$1 in 2025. He bases this forecast on expected increases in domestic corporate debt, higher diaspora remittances, and a potential Eurobond issuance, all of which could boost dollar supply.
