March 13, 2025
Due to massive demand for the US dollar as seen in the currencies market lately, signifying a need for stronger FX support, the naira has continued to deprecate across foreign exchange markets
The exchange rate wss quoted at N1600 per US dollar in the parallel market on Thursday morning, losing N20 already on the day after closing at N1580 on Wednesday.
The naira skidded to N1538 at the official window even with the Central Bank intervention, suggesting a build up of higher demand pressure.
READ MORE; Naira Falls as FX Pressure Mounts Across Currencies Markets
The naira has apparently given up recent past gains it attracted in it last rally in February, where the spot rate appreciated sharply by 2.5% with an exchange rate that tracked below N1500.
Some analysts, believed that the naira retreated as a result of foreign interest that upstreamed the US dollar abroad and the latest round of debt service payments by the Central Bank.
CBN departure from selling US dollars to banks and low FX on the supply side reverberated through the parallel market. Bureau de Change are currently buying $25,000 from banks per week at the official rate, which has helped stabilise the exchange rate in the informal currency market.
READ MORE; Naira Drops With Offshore Demand Eclipsing FX Inflows
Notwithstanding, analysts said the extent of the naira’s recent falls means a “pause for breath” cannot be ruled out in the short term.
However, other analysts maintained a positive outlook for the naira citing the authority’s effort to stabilise exchange rates as positive. Hence he latest round of decline is seen as a short-term development, though the local currency pricing has not settled.
Unless CBN sell US dollars to banks, the naira will not trade at the current rate, possibly rising above N1,600 which suggests that until the government overhauls the nation’s economic structure and earns more foreign currencies, the naira cannot be stable.
