Naira weakens to N1,612/$1 at official market amid persistent FX supply concerns 

This latest weakening comes despite a marginal uptick in the country’s external reserves and efforts by the apex bank to stabilize the currency through increased market interventions.

The naira’s in-day trading performance at the official market indicated heightened volatility.

It traded as high as N1,615/$1 and as low as N1,605.01/$1 on Wednesday. This compares to a slightly tighter range of N1,609.5/$1 (high) and N1,603/$1 (low) on Tuesday.

Market participants cited liquidity pressures and delayed inflows as key drivers of the widening daily range, despite the CBN’s continued assurance of sustained FX interventions.

At the parallel market, the naira was exchanged at N1,625/$1 on Wednesday, slightly weaker than the N1,615/$1 recorded on Tuesday.

On Monday, the rate stood at N1,605/$1, indicating a daily loss of N10 between Monday and Tuesday.

The narrowing gap between the official and parallel market rates—currently hovering around N13—is raising fresh concerns among analysts about the resurgence of speculative demand and continued challenges in accessing foreign exchange through official channels.

Adetokunbo Bamidele, a currency trader and research analyst at a Lagos-based investment firm, noted that while the CBN has made strides in boosting transparency in the FX market, structural issues still linger.

“We are seeing modest progress in terms of price discovery, but the real problem remains the supply of FX. Until the supply side improves—whether through diaspora remittances, oil revenues, or foreign investment—the naira will continue to face depreciation pressures.” 

Similarly, Dr. Kemi Taiwo, an economist at Axion Financial Services, emphasized the need for sustainable policy coordination to boost investor confidence.

“The CBN must go beyond firefighting. What’s required now is a strategic mix of monetary and fiscal policies that can unlock inflows and reduce the reliance on the black market. Otherwise, the arbitrage opportunities will remain.” 

Nigeria’s external reserves saw a slight increase to $38.10 billion as of May 6, 2025, up from $37.93 billion on April 30, 2025.

The increase is attributed to crude oil receipts and possible FX borrowings. However, analysts warn that the reserves may not be sufficient to defend the naira if speculative pressures intensify.