The naira recorded a mixed performance in the foreign exchange market over the past week. This indicates the persistent pressure on the local currency despite the Central Bank of Nigeria’s continued efforts to stabilise the market.
While the naira saw a slight appreciation in the official market, closing at 1,599.94/$ on Thursday, compared to 1,603.78/$ in the previous week, it experienced a significant depreciation in the parallel market.
According to researchers at Cowry Asset Management Limited, the CBN maintained its interventionist stance by implementing weekly FX defence strategies.
“These efforts yielded modest results in the official market window, where the Naira appreciated by 0.24 per cent over the week, closing at N1,599.94 per US dollar on Thursday, compared to N1,603.78 the previous week.
“However, sentiment in the parallel market painted a more fragile picture. There, the naira depreciated significantly by 4.66 per cent week-on-week, ending the week at an average rate of N1,610 per dollar.
“This discrepancy between the official and unofficial market rates underscores the sustained demand pressure on the local currency, particularly from importers and informal market participants, who often struggle to access official FX channels,” said the weekly investors’ note.
The CBN had earlier announced interventions in the FX market to ease liquidity constraints.
Looking ahead to the holiday-shortened week, analysts anticipate a gradual easing of foreign exchange pressures as the Central Bank continues its programme of weekly interventions.
“Looking ahead to the coming week, we anticipate a gradual easing of foreign exchange pressures as the Central Bank maintains its programme of weekly interventions.
“While volatility is expected to persist in the near term, consistent liquidity support could offer the naira a much-needed stabilising anchor, particularly if complemented by improved FX inflows and prudent fiscal coordination,” Cowry Asset Management Limited researchers maintained.
Meanwhile, the Governor of the Central Bank of Nigeria, Olayemi Cardoso, has reaffirmed the CBN’s steadfast commitment to transparency, consistency, and restoring public confidence through orthodox monetary policy reforms.
Speaking at a strategic investment forum hosted at the Nasdaq MarketSite in New York, Cardoso said, “We inherited a crisis of confidence, but we chose a different path. We’re not turning back.”
Experts at Meristem Research also believe that the Memorandum of Understanding signed between Nigeria and South Africa in the past week will increase investment and generate additional revenue in the long term.
