The Nigerian naira has continued its downward trend against major global currencies, recording fresh losses in both official and unofficial foreign exchange markets this week.
Official Market Performance
Data released by the Central Bank of Nigeria shows the naira closed at N1,448.03 to one US dollar on Monday, November 17, representing a decline of N5.60 or 0.39% from Friday's closing rate of N1,442.43/$1.
The depreciation was even more pronounced against the British pound sterling, with the naira weakening by N10.27 to finish at N1,909.23/£1 compared to the previous session's rate of N1,898.96/£1.
Against the euro, the Nigerian currency lost 43 kobo to settle at N1,678.99/€1, slightly down from N1,678.56/€1 recorded in the preceding trading session.
Parallel Market Reaction
In the unofficial black market, currency traders reported similar downward pressure on the naira. Abdullah, a Bureau de Change operator, confirmed to journalists that the exchange rate had deteriorated to N1,460 per dollar, representing a N5 depreciation from the previous rate of N1,455.
The pound sterling traded between N1,890 to N1,910, while the euro moved from N1,660 to N1,675 in the parallel market, indicating broad-based weakness for the Nigerian currency.
CBN Intervention Strategy
Market analysts are anticipating stronger intervention from the Central Bank of Nigeria to stabilize the currency. Last week, the apex bank sold $50 million to support market liquidity, but this appears to have been insufficient to counter the downward pressure.
Despite foreign exchange inflows rising sharply by 91% in October to approximately $6.1 billion, the naira has faced sustained pressure over the past two weeks. This is partly attributed to the CBN's cautious approach to market funding, even as foreign investors show renewed interest in Nigerian assets.
Total FX inflows into the Nigerian market actually fell by 25.23% to $672.3 million from $899.2 million the previous week, after reaching $1.37 billion earlier in November.
Financial experts suggest that the Central Bank needs to resume robust intervention in the market to prevent the naira from sliding back toward the N1,600 level against the dollar.
The recent monetary policy decision saw the CBN cut key interest rates by 50 basis points to 27%, marking the first reduction in five years as inflation begins to show signs of moderation.
