The Nigerian Naira depreciated marginally at the official foreign exchange market on Monday, closing at N1,451.86 per dollar, compared to N1,450.43 on the previous trading day.
According to data from the Nigerian Foreign Exchange Market (NFEM), published by the Central Bank of Nigeria (CBN), the currency traded within a narrow band during the session. The intra-day high was N1,457/$, while the lowest rate touched N1,450.25/$.
The slight weakening continues a trend of cautious trading, with analysts attributing the movement to increased demand for foreign currency as the year-end approaches. Market liquidity is reported to be steady but sensitive to fluctuations in dollar supply.
Analysts suggest the naira’s movement remains within a constrained range, indicating the market is gradually absorbing seasonal pressures while awaiting clearer signals from monetary authorities.
In contrast, the parallel market rate held steady at N1,463/$, according to reports from Cowry Asset Management. This stability highlights the divergent dynamics between the regulated official segment and the informal forex market.
The minor pressure extends from last week, where the naira depreciated by N3.69 against the dollar, closing with a 0.25 percent week-on-week decline. Despite some inflows from foreign portfolio investors and CBN interventions, demand continued to outstrip available supply.
This trend marks a continuation from November, when geopolitical tensions disrupted the naira’s previous appreciation streak. A monthly report by AIICO Capital noted that the currency depreciated modestly in November, with the official rate declining by 1.76 percent to close at N1,446.74/$. The parallel market also weakened by 1.03 percent to N1,470/$.
The report cited heightened mid-month volatility driven by strong dollar demand, triggered by international geopolitical developments involving the United States. These events prompted investor sell-offs and capital outflows. Despite positive developments like CBN reforms and an improved outlook from rating agency S&P, demand for dollars persistently outweighed supply throughout the month.
A supportive factor, however, was the growth in Nigeria’s external reserves, which increased by $1.5 billion month-on-month to $44.67 billion in November. This accumulation, driven by active reserve management and sustained inflows, is expected to provide a stronger buffer for exchange rate stability in the coming period.
