Naira extends decline, ends week at ₦1,454/$1 as holiday-driven FX demand intensifies
The naira continued to lose ground against the dollar this week, closing at ₦1,454 per dollar on Friday as year-end spending ramped up pressure across the foreign exchange market. After holding relatively steady in recent weeks, the currency faced fresh headwinds as importers, retailers and consumers increased their dollar purchases ahead of Christmas and New Year activities.
Data published on the website of the Central Bank of Nigeria showed a consistent weakening pattern throughout the week. The
naira opened at ₦1,450.01/$1 on Monday, strengthened slightly to ₦1,447/$1
on Tuesday, then eased to ₦1,447.5/$1 on Wednesday. It slipped again to ₦1,449/$1
on Thursday before closing the week at ₦1,454/$1.
Traders in Abuja reported midweek
transactions between ₦1,469.5/$1 and ₦1,472/$1, reflecting
pockets of stronger demand in segments of the market.
Market analysts say the pattern
aligns with typical year-end behaviour, when seasonal activities drive a surge
in FX demand. A currency dealer in Wuse Zone 4 told Nairametrics that although
the apex bank has made renewed efforts to stabilise the market, speculative
positioning and increased import volumes have continued to weigh on the naira.
The depreciation comes shortly after
Nairametrics reported that the Federal Government approved the 2026–2028
Medium-Term Expenditure Framework, which includes a projected rate of ₦1,512/$1
for 2026 a signal that official
forecasts are shifting in line with current market realities.
Week-on-week
performance: a reversal from earlier stability
Compared to last week’s closing rate
of ₦1,446.9/$1, the naira ended this week on a weaker note, consistently
trading above the ₦1,447/$1 zone and crossing ₦1,450/$1 multiple
times. This contrasts with the previous week, when the currency showed modest
improvement.
Last week’s movement reflected a
brief period of recovery: the naira opened at ₦1,452/$1 on Monday,
strengthened to ₦1,441/$1 on Tuesday, and hovered around ₦1,442/$1
on Wednesday. It continued the positive trend from ₦1,445.9/$1 on
Thursday before closing stronger at ₦1,446.9/$1 on Friday.
That momentum has now reversed,
underscoring how sensitive the currency remains to demand spikes and broader
market pressures associated with the final quarter of the year.
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Foreign
reserves edge higher to $45.04 billion
There was, however, a slight
positive development. Nigeria’s foreign reserves rose to $45.04 billion,
up from $44.9 billion earlier in the week, according to data posted on
the website of the Central Bank of Nigeria. The increase suggests improved
inflows, potentially from oil revenue, Eurobond-related activity or
multilateral financing. Higher reserves typically offer the central bank more
room to manage liquidity and intervene when needed.
CBN to release updated FX manual to rebuild market confidence
As part of its broader reform
agenda, the apex bank disclosed that a revised Foreign Exchange Manual is nearing completion. The new document is
expected to enhance transparency, improve oversight and strengthen price
discovery across the market.
According to officials, the updated
manual will widen participation, enforce stricter documentation standards,
enhance surveillance in electronic FX platforms and support greater consistency
in market operations. The introduction of the Nigerian Foreign Exchange Code
earlier in the year has already laid a foundation for improved conduct among authorised
dealers, and the forthcoming manual is expected to build on that progress.
What
to know
Nairametrics previously reported
that the naira ended November slightly weaker, extending the pattern of
volatility that has defined recent months. The currency closed at ₦1,446.9/$1
on November 28, compared to ₦1,438/$1 at the start of the month.
