Foreign Exchange Market Shakes the Naira Despite Rise in External Reserves to $50 Billion.
The Nigerian Naira weakened in the foreign exchange markets last week despite the continued growth of the country’s external reserves.
Data from the Central Bank of Nigeria (CBN) showed that the Naira depreciated by about N5.08 at the official Nigerian Foreign Exchange Market (NFEM), closing at N1,363.83 per US dollar. Similarly, in the parallel market, the Naira lost N9, with the dollar trading at N1,409.
The report indicated that reduced dollar supply and lower foreign exchange trading activities contributed to the pressure on the Naira. Transaction volumes in the interbank foreign exchange market declined by more than 30 percent during the week.
However, despite the setback, Nigeria’s external reserves increased to $50.42 billion, representing a growth of more than 32 percent compared to the same period last year.
Economic analysts believe that despite the rise in external reserves, the foreign exchange market continues to face challenges related to dollar liquidity, a situation that continues to impact the value of the Naira.
