The Nigerian Naira ended the trading week on a marginally softer note, depreciating to N1,455.50 per US dollar at the official foreign exchange market on Friday. This compares to Thursday’s closing rate of N1,455.25 and marks a slight decline from last week’s finish of N1,454.
Throughout the week, the local currency traded consistently above the N1,450 threshold—a level not sustained in over three weeks. The pattern echoes a similar period in late November when the exchange rate fluctuated between N1,451 and N1,458.
The minor depreciation occurs against the backdrop of a significant strengthening of Nigeria’s external reserves, which have now reached a six-year high. Data shows reserves climbed to $45.44 billion this week, the highest level since July 2019. This represents an addition of nearly $5 billion in a relatively short period, bolstered by improved crude oil earnings and external inflows.
In a parallel development aimed at regulating the foreign exchange ecosystem, the Central Bank of Nigeria (CBN) confirmed it has issued final operating licenses to 82 Bureau De Change (BDC) operators under its new regulatory framework. The approval, effective November 27, follows updated guidelines introduced in May 2024, which established a two-tier licensing system with higher capital requirements: N2 billion for Tier-1 BDCs and N500 million for Tier-2 operators.
While the rise in external reserves provides a stronger buffer for the currency, analysts note that persistent dollar demand, speculative activity, and seasonal pressures continue to test the Naira’s stability. The licensing of new BDCs is expected to improve market liquidity and transparency over the medium term, though some market observers caution that the influx of new operators could introduce short-term volatility as the sector adjusts to the stricter regulatory regime.
The CBN’s dual approach of building reserves while reforming the retail FX sector underscores its ongoing effort to stabilize the exchange rate and reduce reliance on the parallel market.
