Nigeria’s foreign exchange market extended its bearish run on Tuesday, with the naira closing at N1,383 against the US dollar, reflecting sustained pressure on external liquidity and weakening macroeconomic buffers.
According to data published by the Central Bank of Nigeria, the currency depreciated from N1,369/$ recorded on Monday, reinforcing a persistent downward trend in recent trading sessions.
“The naira weakened from N1,369/$ recorded on Monday, highlighting a persistent depreciation pattern in recent trading sessions,” the report noted.
Intraday trading showed continued volatility, with the local currency fluctuating between N1,367.5/$ and N1,385/$, while averaging N1,380.19/$ before closing at its weakest level since early April. The movement signals ongoing strain on what functions as Nigeria’s external “income stream,” where dollar inflows and liquidity conditions directly influence exchange rate stability.
On a week-on-week basis, the currency also lost ground compared to N1,350.99/$ recorded the previous Tuesday, underscoring the widening gap between demand for foreign exchange and available supply.
Market analysts point to weakening external reserves as a key factor behind the pressure, with declining buffers limiting the ability to stabilise the naira. In business terms, the trend reflects a deterioration in Nigeria’s external balance sheet position, where reduced dollar inflows are constraining market confidence and impacting broader economic “profitability” in currency stability.
The continued depreciation adds to concerns for import-dependent businesses, which face rising input costs as the exchange rate feeds into pricing pressures across sectors. It also raises questions about the sustainability of recent stabilisation efforts in the foreign exchange market as liquidity challenges persist.