The naira recorded a negative trading performance during the week as the naira weakened by 0.99 per cent at the official Nigerian Foreign Exchange Market to 1,456.72/$ as of Friday, from 1,442.43/$ in the previous week. At the parallel market, the currency traded weaker within the range of 1,470/$ and 1,475/$.

According to Cowry Assets Management Limited in its weekly report, “The naira moved within a noticeably wider trading band this week, fluctuating between N1,440 and N1,460 at the official window as softer inflows met firmer dollar demand.” By the close of trading, “the currency had weakened by 0.98 per cent to close at N1,456.72 per dollar.” A similar movement was seen in the black market, where the naira slipped marginally by 0.20 per cent to N1,475 per dollar.

AIICO Capital also noted that the naira traded largely bearish in the FX market for most of the week, “pressured by strong early demand from investors seeking to cover positions.”

The investment house added that the pressure was sustained. “Despite multiple CBN interventions, persistently elevated demand continued to weigh on the currency, pushing the exchange rate weaker from N1,442.43/$ at the previous week’s close to N1,456.72/$ by Friday.”

Nigeria’s foreign exchange market exhibited mixed signals this past week, marked by persistent demand pressure that weakened the naira across the official and parallel windows, despite a consistent and modest increase in external reserves, which stood at $44.19bn as of Thursday.

Despite the exchange rate volatility, Nigeria’s external buffers have continued to strengthen. Data from the Central Bank of Nigeria indicated that the reserves moved from $43.64bn on 14 November to $44.19bn as of Thursday, a 1.26 per cent increase in days.

Cowry Assets explained the factors driving this increase, noting that “The accretion was supported by stable oil receipts, stronger non-oil inflows, and a sustained trade surplus, all of which reinforced the Central Bank’s ongoing efforts to maintain a firmer macro-liquidity backdrop and support overall market stability.”