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The naira reversed its recent gains, depreciating by 1.66% against the US dollar at the official market and closing at 1,517.24/$.
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At the parallel market, the naira also eased to an average of 1,520/dollar, reflecting a gradual uptick in demand for the greenback.
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Analysts attributed the depreciation to increased demand for dollars by foreign portfolio investors and local corporates.
The naira reversed some of the gains it had made in recent times, depreciating by 1.66% against the US dollar at the official market to close at 1,517.24/$.
This decline was also reflected at the parallel market, where the naira eased to an average of 1,520/dollar.
According to Bureau De Change operators, the naira lost as much as N70 to close at 1,570/dollar at the end of the week.
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Analysts attributed the depreciation to increased demand for dollars by foreign portfolio investors and local corporates, as well as tight dollar liquidity.
AIICO Capital Limited stated, “The naira depreciated this week due to tight dollar liquidity and increased demand from foreign portfolio investors and local corporates.”
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CardinalStone also noted that pressure on the naira at the foreign exchange market increased “arising from profit-taking actions by foreign portfolio investors and local corporates, offsetting support from CBN’s intervention at the interbank market.”
Experts believe that the Central Bank of Nigeria’s continued weekly interventions in the FX market will be crucial in dictating currency movements.
However, with a reserve worth $38.35bn, the CBN is expected to have sufficient resources to provide a buffer for the naira.
Naira Depreciates Further Against Dollar at Black Market
The Naira continued its downward trend against the dollar at the parallel foreign exchange market at N1500 per dollar.
According to Abubakar Alhasan, a Bureau de Change operator in Wuse Zone 4, Abuja, the Naira dropped by N10 from the previous day’s exchange rate of N1490 per dollar.
