Naira's Weekly Slide: Decoding the Official Market's 0.4% Depreciation and Underlying Pressures

Naira’s Weekly Slide: Decoding the Official Market’s 0.4% Depreciation and Underlying Pressures

The Nigerian naira experienced a volatile week, opening with a brief appreciation but succumbing to sustained demand pressures to close 0.4% weaker at N1,464.49 against the US dollar. This trajectory highlights the persistent fragility of the currency despite intermittent gains, underscoring that underlying market forces continue to drive depreciation. The key takeaway is that without addressing core demand imbalances, short-term currency strength is likely unsustainable.

Aluta News 1 week ago 2 minutes read

By Grace Alegba
Lagos, Dec. 19, 2025 (NAN)

The Nigerian naira concluded the trading week on a softer note, registering a marginal but telling depreciation against the US dollar in the official market. Closing at N1,464.49 per dollar on Friday, the currency marked a 0.4% decline from the previous day’s rate of N1,457.84, as confirmed by data from the Central Bank of Nigeria’s (CBN) website.

This week’s performance paints a classic picture of a currency caught in a tug-of-war between intermittent gains and persistent underlying pressures. The naira had opened the week with a positive stride, appreciating by N2.59 on Monday to trade at N1,451.81. This initial strength, however, proved unsustainable. The currency began a gradual but consistent slide, weakening to N1,455.08 on Tuesday and N1,455.49 on Wednesday, before the week’s final settlement at N1,464.49.

The core narrative, as highlighted by market analysts, is one of “sustained demand pressures” overwhelming sporadic improvements. This phrase encapsulates the fundamental challenge: demand for foreign exchange—for imports, overseas obligations, and portfolio exits—continues to outstrip the supply made available through the official window. The CBN’s ongoing efforts to clear a backlog of matured foreign exchange obligations and manage liquidity are critical factors influencing daily rates, but consistent dollar inflows from non-oil exports and foreign investment are needed for lasting stability.

For businesses and individuals, this incremental depreciation has tangible implications. It translates to higher costs for importing goods, raw materials, and services, which can fuel inflationary trends. It also increases the naira value of external debt servicing for both the government and private sector. The week’s trajectory serves as a reminder of the sensitivity of the Nigerian foreign exchange market to demand-supply imbalances and global dollar strength. Market participants will be closely monitoring the CBN’s upcoming actions and weekly liquidity injections for signals of the naira’s near-term direction.

(Edited by Kamal Tayo Oropo)
(NAN) (www.nannews.ng)

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