The Nigerian currency, the naira, experienced a slight depreciation against the United States dollar in the official foreign exchange market on Friday, according to data from the Central Bank of Nigeria (CBN).
Official Market Performance
The Nigerian Foreign Exchange Market (NFEM) closed at N1,375.46 per US dollar, reflecting a decline of N3.15 or 0.23 percent compared with the previous session's rate of N1,372.31 per dollar. The naira also weakened against other major currencies in the official market. Against the British pound sterling, it fell to N1,849.72 per pound, representing a loss of N9.46 from N1,840.26 per pound recorded in the preceding trading day. Similarly, the Nigerian currency depreciated against the euro, closing at N1,597.04 per euro, down by N6.26 from N1,590.78 per euro in the prior session.
GTBank and Parallel Market Rates
At the GTBank FX desk, the naira also recorded a mild loss, trading at N1,381 per dollar compared with N1,379 per dollar previously. In the parallel market, also known as the black market, the naira fell against the US dollar, trading at N1,393 per dollar. Traders indicated that the new exchange rate reflected balanced demand and supply conditions in the informal market during the week. A Lagos-based trader, Abdullahi, stated: "I sold the dollar at around N1,393 per dollar, while buying was about N1,382 per dollar. The pound traded between N1,840 and N1,860, and the euro ranged from N1,590 to N1,605. There was no major movement."
Currency Breakdown
Based on CBN published rates, here is a breakdown of the naira's performance against other foreign currencies on Friday: CFA: N2.43, Yuan/Renminbi: N202.47, Danish Krona: N213.67, Euro: N1,597.04, Yen: N8.65, Riyal: N366.52, South African Rand: N83.72, Swiss Franc: N1,751.51, Pounds Sterling: N1,849.72, US Dollar: N1,375.46, WAUA: N1,875.62, and UAE Dirham: N374.46.
Analyst Projections
Analysts at Cowry Asset Management Limited, in their weekly financial outlook, projected that the naira will remain under soft pressure in the near term due to continuous foreign exchange demand. They noted: "Looking ahead, the naira may remain under mild pressure in the near term due to persistent FX demand, though rising external reserves could help cushion volatility."
CBN's Stance on Naira Exchange Rate
Earlier, the CBN reiterated that the naira is not being artificially propped up, stressing that the stability witnessed recently is market-driven following reforms and increased liquidity. This was revealed by Governor Olayemi Cardoso while briefing journalists in Abuja after the Monetary Policy Committee (MPC) meeting. He pointed out that after the past two years of reforms in the foreign exchange market, the market had become much more transparent and market-driven.
