The naira weakened marginally against the US dollar at Nigeria’s official foreign exchange market on Thursday, halting a short run of daily gains recorded earlier in the week. Data from the Central Bank of Nigeria’s official market platform showed the naira depreciated to ₦1,366.05 per $1, down from ₦1,358.28 recorded on Wednesday — a decline of 0.57%.
Despite Thursday’s slip, the local currency remains stronger than it was at the beginning of the week. The naira opened the week at ₦1,390.36 per $1 on Monday, meaning the official market has seen a net strengthening in recent sessions.
The performance continues a stabilising trend after the naira traded above ₦1,400 per $1 for much of late January, a period that raised concerns about currency volatility and pressure on foreign exchange supply.
Official Market Shows Signs of Stability
On Thursday, trading in the official market occurred within a relatively narrow band, with the highest quoted rate at ₦1,370 per $1 and the lowest at ₦1,361.80 per $1. Analysts say this reduced spread signals improved stability and stronger price discovery in the regulated market.
The narrowing gap between high and low rates suggests that volatility has eased, and demand pressures in the official window may be moderating compared with earlier in the year. This has encouraged confidence among authorised dealers, who are playing a key role in managing forex liquidity.
Parallel Market Shows Mixed Signals
While the official market showed stability, the parallel (informal) market recorded mixed movements, reflecting divergent currency dynamics across Nigeria’s FX ecosystem.
- Cowry Assets Management reported that the naira traded flat at ₦1,431 per $1.
- CardinalStone, however, noted a slight depreciation, with the naira closing at ₦1,457 per $1, representing a 0.14% decline.
The gap between the official and parallel market rates remains significant, highlighting persistent fragmentation in currency pricing and access.
Outlook: Modest Strength Expected, but Volatility Remains
Looking ahead, analysts expect the naira to remain volatile but broadly stable, with modest appreciation possible in February. A report by AIICO Capital projected that robust external reserves and sustained high crude oil prices could support the currency, alongside ongoing fiscal and monetary reforms designed to attract foreign inflows.
The report also noted that downside risks from external shocks should remain limited in the near term, suggesting that the official market may continue to stabilise as demand pressures ease.