Naira Weakens, Dollar Demand Rises

The naira has lost recent gains, sliding to ₦1,483 per dollar on Wednesday morning after holding steady in late November, as importers and retailers intensify dollar purchases ahead of Christmas and New Year sales.

The currency weakened after the dollar traded at ₦1,454.38/$ on Tuesday, compared with ₦1,448.43/$ on Monday in the Nigerian Foreign Exchange Market (NFEM), data from the Central Bank of Nigeria (CBN) shows.

Traders say the market has come under sustained but moderate pressure as businesses rush to meet foreign exchange obligations before year-end. The US Federal Reserve’s firm monetary stance and strong retail demand are also pushing the naira lower in the unofficial market, reversing earlier stability.

Naira Records Gains Against Dollar

Increased travel bookings and payment of overseas school fees are further driving retail demand for dollars, especially in the parallel market.

A “hawkish” Federal Reserve typically signals higher interest rates for longer, aiming to curb inflation rather than boost growth. As a result, investors favour the US dollar, leading to capital outflows from emerging markets such as Nigeria.

Despite recent pressure, the Year-to-Date data shows that interventions by the CBN, ongoing FX reforms, and diaspora remittances have strengthened the naira by about 5.7 per cent against the dollar, keeping it within the ₦1,450–₦1,470/$ band since early December.

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Toyibat Ajose

Toyibat is a highly motivated Mass Communication major and results-oriented professional with a robust foundation in media, education, and communication. Leveraging years of hands-on experience in journalism, she has honed her ability to craft compelling narratives, conduct thorough research, and deliver accurate and engaging content that resonates with diverse audiences.