The Nigerian naira weakened against the US dollar on Friday, closing lower amid persistent and outpaced demand for foreign currency in the official market.
trading sessions throughout the day saw sustained dollar demand that exceeded available supply, placing consistent selling pressure on the local currency. This imbalance resulted in a depreciation across key official exchange rate benchmarks by the market’s close.
The Nigeria Foreign Exchange Market (NFEM) Volume Weighted Average Price (VWAP) settled at ₦1,346.32 per dollar, a decline of ₦4.97 from the previous session. Concurrently, the Central Bank of Nigeria’s (CBN) official closing rate also slipped by ₦2.00 to end at ₦1,348.00 per dollar.
Market analysts confirmed that the late-day weakness was driven by stronger demand relative to the liquidity offered within the formal system. This dynamic kept負 pressure on the naira until the final trades were executed.
In the immediate term, without significant new catalysts, trading is anticipated to remain confined to a narrow band, with the exchange rate continuing to be dictated by the interplay of dollar availability and market demand.
This movement occurs against a backdrop of ongoing challenges in Nigeria’s foreign exchange market, where a gap frequently persists between the official rate and the substantially higher parallel market rate. The CBN has implemented various policies aimed at unifying these rates and boosting dollar liquidity, including recent adjustments to the official exchange rate framework.
A depreciation in the official rate typically has pass-through implications for domestic prices, as Nigeria is a significant importer of goods and services. It can contribute to inflationary pressures and affect the cost of external debt servicing. The close alignment of the NFEM VWAP and the CBN’s rate suggests a relatively uniformprice discovery in the official window for that session.
The trajectory of the naira in the coming weeks will remain closely tied to the central bank’s ability to increase dollar supply through oil receipts, foreign investment, and modified investor policies, as well as the overall level of domestic demand for imports.
